Can Bolivia Ever Gain From Its Rich Lithium Resources?

24 May 2022

Bolivia's government is planning this month to sell rights to mine in the country for the element lithium. Officials hope the move will bring economic growth in the country's southwest.

The project is the South American country's most ambitious yet to provide lithium to the world market. The metal is in high demand for use in electric car batteries and electronic devices.

America's Tesla and Germany's Volkswagen are struggling to find supplies while lithium prices have sharply increased.

Bolivian state firm YLB's plant is seen at the Salar de Uyuni, a vast white salt flat at the center of a global resource race for the battery metal lithium, outside of Uyuni, Bolivia March 26, 2022. (REUTERS/Claudia Morales)
Bolivian state firm YLB's plant is seen at the Salar de Uyuni, a vast white salt flat at the center of a global resource race for the battery metal lithium, outside of Uyuni, Bolivia March 26, 2022. (REUTERS/Claudia Morales)

But it remains unclear if Bolivia can meet its goals.

Reuters news agency spoke to many current and former officials and local people around Salar de Uyuni, a dry lake bottom, in the southwestern part of the country.

These people identified a number of barriers to the big project, including legal questions, technological issues and resistance from citizens. In addition, there are likely to be political disagreements within Bolivia's ruling socialist party over taxes and how to divide profits from the project.

Bolivia expects to announce later this month one or more partnerships with foreign companies. Eight competitors from China, Russia, Argentina and the United States are making financial offers, or bids. Reuters says none of the companies have experience in commercial mining of lithium.

The South American country has set a high goal. It seeks to make lithium-ion batteries locally by 2025.

Bolivia's neighbor Chile has been seeking the same goal for years without success, however. And it is a far wealthier country.

Juan Tellez is an advisor to the local governor. He said official do not expect any production until 2030 or five years behind the central government's plan.

The U.S. geological survey estimates that Bolivia has about one fourth of the world's known lithium resources. But it remains unclear if the metal can be recovered commercially.

That past is the past

Bolivia has spent hundreds of millions of dollars using traditional methods to extract lithium with little success. For this project, President Luis Arce wants contracts with companies that use a different, and untested, technology called "direct lithium extraction."

The list of companies willing to try includes the U.S. companies Lilac Solutions, Breakthrough Energy and EnergyX. Others include Argentina's Tecpetrol, Russia's Uranium One, and China's Fusion Enertech, CITIC Guoan Group and TBEA.

Arce's government is allied with Russia and China. But U.S. officials say they believe the two American companies have a fair chance.

Alvaro Arnez is a deputy minister in Bolivia's energy department. He oversees lithium development. He says it is important for the government to produce results to show that it is serious.

Salar de Uyuni is not too far from Potosí, a colonial center for silver production for the Spanish Empire. Now it is an area where the ruling socialist party has strong support. But local officials criticized the current president for trying to control lithium production without their approval.

"We don't even have a channel to express our opinion," said advisor Tellez, adding: "We are finding out (decisions) through the press."

Deputy minister Arnez said the Bolivian government has proposed creating business partnerships to extract lithium and manufacture batteries. The government would own 51 percent and get about half the profits from the ventures.

To do this, however, Bolivia has to amend its laws which bar foreign companies from extracting lithium. Local government officials want to use this fact to negotiate a greater share of the profits. They want 15 percent instead of the three percent they would get under current law.

The town of Uyuni gives the huge dry lake bottom its name. Eusebio Lopez said that, "as owners of these riches," the people living there should get the greatest gain from the project.

A state lithium extracting plant in the area employs 700 people, but few come from local communities.

"We have minerals, we have lithium," said Uyuni villager Karina Quispe, adding: "The people here should receive something."

Juan Carlos Montenegro is a former government lithium mining official who served under former president Evo Morales. He warned that people are too excited. "It's not grounded in reality," he added.

I'm Mario Ritter Jr. And I'm Caty Weaver.

Reuters news agency reported this story. Mario Ritter Jr. adapted it for VOA Learning English.


Words in This Story

ambitious –adj. having the desire to be successful, powerful and famous

battery –n. a device that stores electricity to run equipment

commercial –adj. used for business purposes

extract –v. to take a specific substance from a material by use of machines or a chemical process

channel –n. a way of expressing ideas, opinions

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