Celebrate the Facts!
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?
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
Fast facts about 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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Michael Donnelly investigates societal concerns with an untribal approach - to limit the discussion to the facts derived from primary sources so the reader can make more informed decisions.