Draft:Lithium Mining in Bolivia

Lithium mine at the Salar de Uyuni salt flat in Bolivia

Lithium Mining in Bolivia has grown in political and economic interest in recent years as lithium is a key resource that is essential for batteries used in many types of products such as cellphones and electric vehicles. Lithium has grown in value due to the increased demand for these products and a growing global emphasis on renewable energy. More than half of the world’s lithium reserves are located in what is known as the lithium triangle: an area that spans parts of Argentina, Bolivia, and Chile. Bolivia has the world’s largest reserves of lithium making up an estimated thirty-eight percent of the global total. Bolivia’s neighboring countries of Chile and Argentina are responsible for around forty-five percent of the global production whereas Bolivia makes up less than one percent.

History

President Morales in 2017

In 2008, then president Evo Morales announced state control of the lithium industry under the state’s lithium company Yacimientos del Litio Boliviano (YLB). Lithium was seen by many as the future of the country’s economy and a key resource that could be used strategically to transform Bolivian society, yet this idea has not yet been fully realized, largely due to the absence of foreign investors. YLB has struggled to increase production and most attempts to work with private foreign companies, such as a 2018 deal with the German company ASISA, have been hindered by protests.

Since Morales left the presidency in 2019, in part due to protests related to the ASISA deal, the government’s position has shifted slightly. The current president of Bolivia, Luis Arce, is more supportive of foreign investment than Morales and has looked into the possibility of foreign collaboration to expand the industry. This change has been met with fierce opposition from movements that wish to limit foreign involvement. In 2023, YLB made a deal with the Chinese battery company CATL to allow for the further industrialization of the industry. YLB is still in talks with other foreign companies from the US, China, and Russia.

The Lithium Triangle

The Lithium Triangle

Bolivia is located in the Lithium Triangle with its neighboring countries of Chile and Argentina. Each country has large lithium reserves but varying policies and outcomes with Bolivia experiencing the lowest levels of production.

Chile

Of the three countries, Chile has consistently outpaced its neighbors in terms of production even though it has the lowest share of resources. Extraction is cheaper in Chile than in any other country due to its natural conditions, and trade agreements with the US and the EU are also beneficial.  However, in recent years, Chile has struggled to expand the industry even as demand for the mineral has increased. This is largely due to the government’s plan, announced April 2023, to increase state control over the lithium industry. No new investments have been made since this announcement and with the control of state-owned mining companies expanding, the role of the private sector is growing more uncertain. This lack of investment has caused production to slow, leading to predictions that Argentina may surpass Chile and become the largest producer in the Lithium Triangle.

Argentina

While Chile is increasing state control and regulation, Argentina is attempting to make the industry more favorable to investors. In Argentina provincial governments are responsible for regulating the mining sector which has allowed for deals to be made more easily. Additionally, provincial governments in Argentina collect only a three percent tax from mines compared to forty percent in Chile and forty-five percent in Bolivia. Argentinian President Javier Milei has worked to undo regulations, increasing the confidence of investors. By the end of 2025, Argentinian lithium production is estimated to increase fivefold, surpassing Chile as the largest Latin American producer.

Protests have occurred throughout Argentina where local communities have little say in mining deals that affect their land, in contrast to Bolivia and Chile where indigenous groups must be consulted

Limits to Industrialization

A sign urges voters to vote yes to a plurinational constitution (2009)

There are several factors that may contribute to Bolivia's low levels of production in contrast to Chile and Argentina. An issue that limits the industrialization of the lithium industry is the decentralization that has occurred since the country adopted a plurinational framework for governing in 2009. This decentralization has made it difficult for the national government to industrialize the industry without the consent of indigenous communities. This, coupled with a rejection of foreign investment, may be responsible for the low levels of production. Bolivia has also faced technological complications as the process of extracting lithium from Bolivian salt flats is far more challenging, time consuming, and expensive than it is in other countries.

Criticisms

Individuals who live near Bolivian lithium mines are often angered that the economic benefits from lithium mining have not been seen in their communities. Another frequently raised issue is that the process of lithium extraction requires a substantial amount of water, which has caused water shortages for individuals living in this area and has made it difficult for farmers to grow crops or maintain livestock. In total, sixty-five percent of the water supply in the Lithium Triangle has been consumed by this extraction.

See Also

• Mining in Bolivia
• Mining in Chile
• Mining in Argentina
• Lithium Triangle

References

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Categories:

• Lithium
• Mining
• Bolivia