Bolivia’s salt flats have lengthy been a vacationer draw: an awesome white expanse that, when it floods, turns into an unearthly mirror of the sky. However lately guests could have glimpsed tiny silhouettes of excavators on the horizon – a touch of the commercial future that awaits.
The brine beneath the salt flats incorporates big quantities of lithium, the steel important for the electrical batteries and the inexperienced power transition. On Friday, Bolivia introduced it will accomplice with a Chinese language consortium to extract it, reviving desires of a lithium-powered economic system.
Surging demand for lithium has precipitated costs to extend greater than 10-fold since 2020, to report highs of nearly $85,000 per tonne. And in response to the USA Geological Service, Bolivia has 21m tonnes of lithium: greater than some other nation on the planet.
It’s but to extract vital portions of the steel. However Bolivia could but have time to affix the market whereas excessive costs final.
“Right this moment begins the period of industrialisation of Bolivian lithium,” mentioned President Luis Arce, when the brand new deal was introduced.
“There’s no time to lose,” he added.
Bolivia first declared its intent to industrialise its lithium shortly after former president Evo Morales led the Movimiento al Socialismo (Mas) to energy in 2006. The Mas has ruled for all however one 12 months since, together with the present administration.
All through, the Mas has insisted on sovereign management of Bolivia’s lithium, with the state making an attempt to develop it alone, or with restricted enter from overseas corporations.
The everyday methodology to extract lithium entails pumping brine into ponds and processing the lithium salts that crystallise as soon as the water has evaporated.
The Bolivian state has invested roughly $800m on this methodology, with a grid of ponds and an unfinished plant that it says will start producing 15,000 tonnes of lithium carbonate each year beginning this 12 months.
That will make Bolivia a minor participant within the international market, which produced greater than 600,000 tonnes of lithium carbonate in 2022.
However this methodology, which works nicely sufficient within the salt flats of neighbouring Chile and Argentina, is much less nicely suited to Bolivia, the place the brine has excessive ranges of impurities and the salt flats have a wet season of a number of months.
YLB, the state lithium firm, has admitted to comparatively poor outcomes.
And when Arce’s authorities got here to energy in 2020, this arm of the lithium challenge gave the impression to be relegated.
In a change of technique, YLB known as for proposals from overseas corporations to develop new “direct lithium extraction” applied sciences that may pull lithium straight from brine, doubtlessly with out the necessity for photo voltaic evaporation.
Such applied sciences may lower water use and scale back dependency on the climate. However they’re largely unproven, with just a few examples of use at industrial scale.
The Chinese language consortium that made the successful proposal consists of CATL, the world’s largest battery producer.
The deal additional locks in Chinese language dominance of the battery trade and its provide chains. Simply two Chinese language corporations, CATL and BYD, produce greater than half of the world’s batteries. Roughly 60% of the world’s lithium is processed in China.
There could but be extra offers to return. The Bolivian authorities mentioned it was nonetheless negotiating with the 5 different corporations from China, Russia and the US.
There are few particulars concerning the present settlement, besides that it consists of greater than $1bn of funding for industrial complexes in two of Bolivia’s three salt flats, every of which can produce 25,000 tonnes of lithium carbonate a 12 months.
Arce added that Bolivia would start exporting electrical batteries in 2025.
However the announcement left many questions on the character of the funding, how the challenge might be managed and the way the earnings might be cut up between the consortium and the assorted ranges of Bolivia’s authorities.
And even advocates of transferring up the worth chain have been sceptical concerning the plan to supply batteries by 2025.
“The truth of the nation reveals us that this dream is unattainable,” mentioned Héctor Córdova, former president of Bolivia’s state mining firm. “We lack the fundamental trade, we don’t have certified personnel, nor do we have now a plan for industrial growth in so quick an area of time.”
The cope with the Chinese language consortium isn’t the primary that Bolivia has signed with overseas corporations.
In 2018, it signed a cope with ACISA, a German firm, solely to cancel it within the face of protests within the metropolis of Potosí, capital of the area that holds most of Bolivia’s lithium.
The Potosí civic committee, an umbrella civil society organisation within the metropolis, started a strike over the phrases of the ACISA deal shortly earlier than the October 2019 presidential election. Morales gained that vote amid allegations of fraud – later contested – that sparked protests throughout the entire nation.
In response, Morales cancelled the cope with ACISA. However the protests continued, the police mutinied, and the military instructed Morales resigned, which he did.
Morales has described the occasions of 2019 as a “lithium coup”, claiming the US needed to punish Bolivia for searching for partnerships with Russia and China – though the deal was with a German firm, and on phrases broadly seen as beneficial for that firm.
The civic committee of Potosí has demanded to know the main points of the brand new deal, with the implied risk of contemporary protests.
In the meantime in cities like Río Grande, on the sting of the salt flats, the announcement was met with a combination of hope and doubt.
“There might be guarantees of jobs, cash and growth for the area,” mentioned Donny Ali, a resident of Río Grande and former director of lithium at YLB. “However we’ve been listening to this for the reason that governments of Evo Morales.”
Other than financial advantages, says Ali, the best concern is over water: it isn’t recognized how a lot of it’s underground, not to mention how a lot of it the lithium mining will use.
Ali has one eye on Chile, the place native communities have reaped the advantages – and borne the associated fee – of lithium mining for years already.
“I need to see if this cash has actually helped them,” mentioned Ali. “In the event that they actually favor the cash – or in the event that they would like to have water stability and better concord with Mom Earth.”