Lithium: Bolivia’s dangerous prize
On the residue of a vast inland sea, indigenous Andean workers continue to dig salt in the same backbreaking way of their ancestors. Meanwhile in France, Bolivian President Evo Morales is in the unusual position of being courted by international conglomerates for access to the Salar de Uyuni’s precious resources.
Morales is receiving advances from industrialist Vincent Bolloré. He has also had representations from Japan’s Mitsubishi and Sumitomo, and South Korea’s LG. The Latin American nation holds half the world’s lithium; while other countries have deposits, “the prize is clearly in Bolivia”, says Oji Baba of Mitsubishi’s Base Metals Unit.
Socialist Bolivia is in a position to make demands. General Motors, Nissan, Ford and BMW are among those planning to produce cars using lithium batteries. The lightest metal and least-dense solid, lithium should store more energy than any other material – its untapped potential is huge.
Bolivia has much greater ambition for its investors than the mere extraction of its riches. Presidential spokesman, Ivan Canelas, said the winning suitor “will make a proposal to the Bolivian government regarding research, (lithium) production and even the manufacturing of cars in our country.”
The government will be demanding partners. President Morales is a nationaliser by instinct, and his contract renegotiations have shocked US, European and Latin American investors. The natural gas and oil industries have been taken back into state hands, while tax demands have been raised on foreign companies.
A history of wasted resources and exploitation
In the past, Bolivian tin, silver and gas has enriched foreign countries, individuals or created division at home. Morales is determined to take a different route with this new bounty.
President Morales has laid the cornerstone of a US$6 million lithium development plant. In theory, production will begin this year, but analysts say the investment is insufficient and work is slow.
State-owned company Comibol is managing the project. Saul Villegas, head of the division overseeing lithium, said: “The previous imperialist model of exploitation of our natural resources will never be repeated in Bolivia.”
In an interview, Luis Alberto Echazú, minister of mining and metallurgy, said that foreign companies are welcome but they must follow the government’s orders.
More problems for investors include the minefield of state bureaucracy, harsh winters and lack of a developed road system. Latin America’s three main lithium producers have all decided that this cocktail of factors is enough to deter them.
Untested indigenous influence
The salt collectors, indigenous to this poor part of South America’s most impoverished country, are also entitled to their share of the income. Emboldened by a new constitution giving them new, vaguely defined, power, they could have control over the resources on their territory, with a claim on concessions and perhaps even a veto on development.
Francisco Quisbert, leader of a local union of salt gatherers, said: “We know that Bolivia can become the Saudi Arabia of lithium. We are poor but we are not stupid peasants. The lithium may be Bolivia’s but it is also our property.”
Volatility is the only political constant in Bolivia. Some lowland prefectures are arguing for greater autonomy from the government. The arguments culminated last September in the deaths of 32 people and the expulsion of the US Ambassador, who was accused of interference.
With a new precious resource to argue over, there is a danger of internal divisions and external influences stirring up an already incendiary situation. The consequences could be difficult for investors and the country as whole.
Jonathan Stibbs for RT