According to President Luis Arce, Bolivia is “threatened” and “in the eyes” of the “international right” for its wealth in lithium, the basic mineral used in the manufacture of electric batteries and therefore one of Bolivia’s strategic natural resources this weather. On March 20, in a speech to his party’s bases, Arce was thus responding to Laura Richardson, head of the US Army’s Southern Command, who had spoken a few days earlier in a statement to a commission of that country’s Congress He had his concerns about the Chinese Presence expressed in the so-called “Lithium Triangle” of South America, formed by three mineral producing countries Chile, Argentina and Bolivia. “This region is brimming with resources and I am concerned about the malicious activities of our opponents who are exploiting them by pretending to invest when in fact they are mining,” the American said.
While it’s not the first time Richardson and Arce have clashed over the matter, the military chief’s latest statement came two months after Bolivia signed an agreement with Chinese consortium CBC (consisting of CATL, BRUNP and CMOC companies) two plants to build in the salt pans of Coipasa (in the Oruro region) and Uyuni (in the Potosí region). Each of these plants will have a production capacity of 25,000 tonnes of battery grade (i.e. high purity) lithium carbonate per year and is expected to be complete by 2025.
This agreement brought two innovations: It established the cooperation of the Bolivian government with a foreign company to exploit the lithium reserves of that country, which are the largest in the world in brine (at the amount of 21 million tons). The country has not yet succeeded in doing this due to the resistance of the Potosí growing region to previous partners. What’s more, it was the first industrial investment in even experimental technology for “direct extraction” of lithium from brines.
Bolivia manages to produce only 600 tons of lithium carbonate per year with conventional technology, through evaporation ponds, so it has not yet joined the club of big players in the market for this raw material. However, a completely Bolivian plant, which according to government plans is to produce 15,000 tons, is due to go online before the end of this year. Overall, by 2025, Bolivia is expected to produce more than its neighbors Chile, which exports around 40,000 tons, and Argentina, which sells 6,000 tons a year.
Although the Chinese consortium is made up of reputable companies (CATL is the world’s largest battery maker), Richardson’s testimony reiterates a constant attack on China, which is accused of investing in Latin America to attract resources for its own development without engaging with local development to deal with .
According to some experts, Bolivia wasted time exploiting the lithium it had because it wanted to do it without foreign involvement and was trying to build a very complex industry on its own. In just over a decade and with an investment of around 1,000 million dollars, the largest that the Bolivian state has made in a mining project, it has four pilot plants, 20 lines of evaporation ponds and two industrial plants, one of which is lithium carbonate and another is potassium chloride, a substance also used in batteries.
Subscribe to EL PAÍS to follow all the news and read without limits.
subscribe to
While Bolivian law initially stipulated the “industrialization” of lithium through a “100% Bolivian” venture, this became more flexible in 2018 and the government of Evo Morales agreed with the German company ACI Systems on the use of another technology with that not Carbonate is formed, but lithium hydroxide (both substances are interchangeable and are used equally for the production of batteries). The agreement stipulated that the chemical products sold by the German company would not pay royalties to the Potosí region, where the Uyuni salt flats are located; Royalties would only be levied on brines extracted from the salar. This clause sparked a harsh regional conflict against Evo Morales’ government that began in June 2019 and coincided with the national protests against that president over the results of that year’s elections. Before the fall, Morales canceled the agreement with ACI Systems to try to demobilize Potosí, but his decision had no effect. In the end he had to resign and go into exile.
The contract terms with the Chinese consortium CBC are not yet publicly known. This fact and the current royalty percentage, which is around 3%, reawaken the vulnerability of Potosí, which is very great due to the memory of the silver plunder during the colony. Last week there was a roadblock by Potosí farmers and a 72-hour strike by the Potosí Citizens’ Committee to approve a new law that would increase regional royalties to 20% if the price of a ton of lithium exceeds $30,000. The ton is currently sold in more than 70,000.
So far the conflict has not been very intense, but it is feared that it will escalate as production from the plants already built increases. In his speech on March 20, President Arce also warned against the “internal right” which he says wants to destabilize his government. A former mining minister, José Pimentel, urged in a journalistic column not to kill “the wawa (the baby)” of lithium, as was done back in 2019.
Furthermore, it must be taken into account that Potosí also carried out large-scale mobilizations and obtained the cancellation of another lithium mining project by a foreign company in the 1990s, at a time when neoliberal policies were being pursued in the country.
Subscribe to the EL PAÍS America newsletter here and receive all the latest news from the region.