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Bolivia Attempts to Parlay Its Lithium To A Better Future Against Long Odds

11/7/2021

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​Bolivia is in the crosshairs of Russia, the United States, and China, and its new president is playing all of them towards his middle.  The industrial powers covet lithium, the world’s most recent strategic mineral, and Bolivia faces an extreme challenge of managing a traditionally villainous mining industry to its benefit.  Can it withstand the tides of the superpowers and play them to its advantage?
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Portrait of Simon Bolivar, Latin American Freedom Fighter
​Bolivia, named after freedom fighter Simon Bolivar, broke from Spanish colonial rule in 1825. Like many new countries, a series of coups and countercoups punctuated its governance until the people established a democracy in 1982. As a result, its leaders have faced deep-seated poverty, social unrest, and illegal drug production
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Bolivia is About Three Times the Size of Montana
​Fast facts about Bolivia:
  • The climate varies with altitude; humid and tropical to cold and semiarid.
  • The terrain varies from the jagged Andes Mountains with a highland plateau (Altiplano), hills, lowland plains of the Amazon Basin.
  • Slightly less than three times the size of Montana.
  • Landlocked and bordered by Argentina, Brazil, Chile, Paraguay, and Peru.
  • Natural resources include tin, natural gas, petroleum, zinc, tungsten, antimony, silver, iron, lead, gold, timber, hydropower, and lithium.
  • The population is about 12 million.
  • Ethnicities include Mestizo (mixed white and Amerindian ancestry) 68%, Indigenous 20%, White 5%, Cholo/Chola 2%, and African descent 1%.
  • There are 36 indigenous languages, including a few that are extinct.
  • Religious identification includes Roman Catholic 70%, Evangelical 14.5%, Adventist 2.5%, and Mormon 1%.
  • Up to 16% of Bolivia’s population lives abroad in Argentina, the United States, and Spain.
  • About 71% of people live in cities.
  • About 93% of people above the age of 17 are literate.
  • It has a civil law system with Roman, Spanish, canon (religious), French, and indigenous law influences.
  • The per capita gross domestic product (GDP) is $7,900 in 2017 dollars.
  • The 2017 unemployment rate was 4%.
  • Military expenditures are about 1.3% of GDP, and there is mandatory service for all men between the ages of 18 and 22
  • It is the third-largest source country of cocaine.
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Evo Morales, First Indigenous President of Bolivia
In December 2005, Bolivians elected socialist leader Evo Morales president by the widest margin of any leader since the first democratic elections in 1982.  Morales was the country’s first indigenous president and ran on a platform to change Bolivia's traditional political class and empower the nation's poor, indigenous majority. In 2009 and 2014, Morales easily won reelection.

In 2016, Morales lost a referendum to approve a constitutional amendment that allowed him to compete in the 2019 presidential election. A 2017 Bolivian Supreme Court ruling stating that term limits violate human rights justified his party nominating Morales again in 2019. Morals claimed victory in the 2019 election, but allegations of electoral fraud, rising violence, and pressure from the military forced him to flee to Mexico. An interim government led by right-wing President Jeanine Anez Chavez prepared new elections for October 2020.
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Luis Arce, former finance minister under Morales, won the election in a landslide.  Arce returned the country to socialist governance. Arce had been the architect of the economic transformation during Morales’s presidency.
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Lithium Mining in Bolivia
Lithium is the most critical resource found in electric vehicle batteries and clean energy storage batteries.  Bolivia has more of it than any other country, but Bolivia has not yet produced lithium commercially. Arce wants to change that. In his campaign platform, Arce called for massively ramping up Bolivia’s lithium production capacity to supply 40 percent of the global market by 2030, turning the small South American nation into a major player on the world stage. In addition, Bolivia aims to build Latin America’s first electric vehicle battery production location, thereby providing jobs for the people of Bolivia. Arce estimated about 130,000 jobs in lithium-related industries by 2025.
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Building extraction plants and the appurtenant coordination require about ten years before production, and lithium supplies have become a strategic concern for technology manufacturing hubs. China, the European Union, Japan, South Korea, and the United States collectively import 78 percent of the world’s total dollar value of lithium.  That demand will continue to rise, so the significant powers will do whatever it takes to secure access to supplies.
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Lithium Evaporation Pond in Bolivia
Bolivia’s lithium production potential is massive. The country is home to the world’s largest salt flat, the Salar de Uyuni, which contains an estimated 23 million tons of lithium in briny fluid deposits just beneath its surface.  Coipasa and Pastos Grandes, two other Bolivian salt flats to the north and south of Uyuni, respectively, also contain massive amounts of lithium. Australia, currently the world’s largest producer, has just 6.9 million tons of lithium reserves.
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The Bolivian government solicited companies with direct lithium-extraction technology (EDL) to conduct pilot tests at the Uyuni, Coipasa, and Pastos Grandes salt flats. As a result, Russia's Uranium 1G, China's Gangfeng Lithium, TBEA, and U.S.-based EnergyX recently participated in an online meeting YLB and the ministry held with potential investors. 
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Evo Morales and Vladimir Putin with Unknown Aide
Russia has been courting Bolivia, as its anti-United States posturing under President Evo Morales made it an attractive political partner. Russia, in return, provided its expertise in natural gas extraction and delivery, a much-needed boost to the development of Bolivia’s second-largest natural gas reserves in South America.

Bolivia and Russia have cooperated at the United Nations as Bolivia was one of 11 countries that voted against a March 2014 resolution in the UN General Assembly condemning Russian actions in Crimea.  Also, in April 2018, Bolivia supported Russia in opposing a resolution criticizing Syria’s use of chemical weapons.
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Gazprom, the Russian natural gas company, has been working on various oil- and gas-related projects in Bolivia in recent years. Also, Rosatom signed a contract to build a nuclear research reactor in the Bolivian city of El Alto in 2017.
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President Evo Morales and President Xi of China
As detailed in previous investigations, China has been paying much attention to Latin America and has thrown some seed money at Bolivia.  Most of the projects underway with Chinese support are roads, including El Sillar (a stretch on the highway from Santa Cruz to Cochabamba), Rurrenabaque to Riberalta in the Amazon, and El Espino to Boyuibe in the Chaco, although there are also others such as the Mutún steel plant and the joint exploitation of lithium in the southern salt flats of the country. Older projects such as the Rositas hydroelectric dam have stalled, and the Santa Cruz airport extension is defunct.

History is full of small, resource-rich countries attempting to leverage natural resources to their advantage to no good end, with few countries succeeding in such admirable endeavors.  Bolivia is trying to leapfrog the typical process by creating value-added manufacturing facilities, like oil-rich countries refining their crude. However, this approach complicates matters as every industry requires profound planning to support it.  Water supply, wastewater management, electricity, natural gas, roads, bridges, ports, harbors, and the like need decades to plan and build.  The likelihood of being to pull both off in the near term is faint.
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Arce is doing his best with what he has at hand, hoping for a good outcome against some very sophisticated and brutal international players. Unfortunately, it is far more likely that Arce and the Bolivian people's hopes meet a terrible end than a good one.
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    The Investigator

    Michael Donnelly examines societal issues with a nonpartisan, fact-based approach, relying solely on primary sources to ensure readers have the information they need to make well-informed decisions.​

    He calls the charming town of Evanston, Illinois home, where he shares his days with his lively and opinionated canine companion, Ripley.

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