November 13, , PM. Lithium is critical to batteries, clean energy, and electric cars—is lithium the new oil? So does exploding global demand for lithium explain the upheaval in Bolivia? I read that China controls global lithium production, which is why the United States wanted to frustrate it. How hard could it be for Bolivia to match those countries? Passport Andrew Polk. Tags: Bolivia , China , United States.
November 11, , AM. Trending 1. Immigration Reform Needs a New Strategy. Why Ethiopia Should Trust the West. Latest Analysis. Or are they? They quip that the silver extracted by the country's former Spanish rulers alone would have been enough "to build a bridge from Bolivia to Europe.
Bolivians attach big hopes to their country's huge lithium treasure and want a fair share of the revenues expected from it. While Potosi's silver deposits are nearly exhausted, another treasure not far away has caught the attention of Bolivia's government and mining companies worldwide: lithium.
Underneath the Salar de Uyuni — the largest salt flat on earth stretching for over 10, square kilometers 3, square miles — lies the world's largest single deposit of the raw material. The 20 million tons of lithium estimated to be won from the deposit are urgently needed to satisfy growing battery demand from electric carmakers worldwide.
On a sunny Friday in April , Juan Carlos Montenegro came to the town of Uyuni to tell a crowd of locals gathered on the main plaza that the lithium treasure would be used for the benefit of all Bolivians. That same day, the chief executive of Bolivian state-owned mining company YLB officially launched a mammoth project that was expected to produce 40, tons of lithium dioxide per year, and a group of German small and medium-sized companies was supposed to help Bolivia achieve that.
Two years after Montenegro visited Uyuni, the Bolivians are still waiting for the riches they were promised. The lithium project has been put on ice by former Bolivian president Evo Morales, who scrapped the contracts with the German investors in November following massive public protests.
The local population and business leaders had demanded a fairer share of the lithium spoils. Since then, the mining project has been simmering on the political backburner, as wrangling for the country's leadership, including Morales' flight into exile from which he returned just this week, plunged domestic politics into turmoil.
But the dust appears to be settling after leftist leader Luis Arce won the recent presidential election. The former economy minister in the Morales government seems willing to restart the project, including Bolivia's partnership with the Germans. Will Luis Arce center restart the lithium project with German firms or with other investors offering Bolivia a better deal?
Arce has gained the reputation of being a pragmatic politician. In late , he entered YLB into a joint venture with a German firm called ACI Systems , which claimed to have new technology that could help Bolivia extract large quantities of lithium from waste brines left over from evaporation processes.
Locals started to mobilize against Morales, ultimately pressuring him to annul the joint venture last November. About a week later, Morales was forced to resign amidst broader national unrest over contested election results and military intervention that some have described as a coup. Reached for comment, Benchmark declined to elaborate on what its role will look like moving forward.
Arce might even try to restart the German joint venture. Juan Carlos Zuleta, a Bolivian economist who briefly led YLB under the interim government and has strongly criticized the partnership with ACI Systems, told Grist he suspects that Germany is already exerting pressure on the new administration to re-adopt the deal. Riofrancos suspects that compared to a more centrist or right-wing president, Arce will do a better job negotiating deals with foreign companies that are beneficial to Bolivians.
Bolivia is home to at least a quarter of the world's known lithium reserves, but technical, political and economic factors could prevent a 'white gold rush'. As development of consumer electronics and batteries for electric vehicles continues to gather pace, demand for lithium, a key component in these products, draws focus to regions like Bolivia where large amounts of the mineral can be found.
Lithium has grown significantly in stature in recent years as a key ingredient used in the production of consumer electronics and electric vehicles. From these regions, the metal is exported to countries like China and South Korea where electronics are being manufactured in earnest — providing developing, resource-rich economies with a potentially lucrative pathway for mineral extraction. But recent political instability in these countries — Chile and Bolivia in particular — has cast mining prospects in a new relief, and highlighted the drawbacks of reliance on commodities based in volatile areas of the world.
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