The Bolivian model of lithium mining

First of all, I would like to thank you very much for the invitation and say a few introductory words on the subject of neutrality, which is really very important. It was a disappointment for me that Switzerland now wants to supply weapons to Ukraine. When Chancellor Scholz flew to Brazil and asked President Lula to supply weapons to Ukraine, he said very clearly to the press: “No, we won’t do that!” I was really disappointed that Switzerland didn’t do the same. But I now know that the Swiss will fight for neutrality!

Lithium, an
important Bolivian export product

Now to Bolivia. At the moment, it is to some extent fortunate that the state not only respects the constitution, but also stands up for the interests of the majority. I would like to talk here about how the state is involved in lithium mining. This raw material, which is essential for industry, is an export product of Bolivia. I do not want to go into the technical significance of lithium here, but I assume that many people are aware that lithium is important for the production of batteries and that these are of great importance for electromobility and electric cars. One more word: The information I will give here comes largely from the press and from the collective work of the association Ayni für Ressourcengerechtigkeit e.V., which we founded in Leipzig in 2012 (www.ayni-ev.de). 

Bolivia has the
world’s largest lithium reserves

Bolivia is one of the countries with the largest share of the world’s lithium resources. Until recently, it was estimated to have 21 million tons. In recent months it has become known that the figure is as high as 23 million tons. There are more than 20 salt lakes in Bolivia, and the figure of 23 million tons refers to only three or four of them. This means that the resources are considerably larger. Argentina has 19 million tons, Chile 10 million tons and Mexico 2 million tons of the world’s lithium resources. The largest lithium producer today is Australia, followed by Chile, China, Argentina and Brazil. Australia produced 61,000 tons in 2022.
  Bolivia, Argentina and Chile are the three most important lithium producers in Latin America. The so-called lithium triangle, which connects these countries, contains around 62% of the world’s reserves. Just a side note here: These countries, and therefore also the triangle where lithium is exploited today for the countries of the North or the Far East, belonged to the Tawantinsuyu (Inca Empire) before the colonial era, which was divided up with colonisation.

Two models of lithium mining

There are two models of lithium mining: the state model and the private model. We know the private neoliberal model well enough. In the state model, there is the joint venture model, a mixture of state and private shares, and the 100 % state model. The Bolivian model is 100 % state-run. There are two basic conditions for the Bolivian model: Firstly, lithium as a strategic raw material is enshrined in the constitution and secondly, it is also enshrined in the mining laws (however, this provides for joint ventures for the industrialisation of lithium with majority state participation). Both were passed during the indigenous government of Evo Morales.

Cooperation with
Chinese and Russian companies

For the countries of the North, i.e. for the buyers, lithium is considered a “critical” raw material and is also referred to as such. But for us in Latin America and Bolivia, it is a strategic raw material. And if this is stated in the constitution, only the state can exploit it or grant permission to mine the raw material for the benefit of the Bolivian state. Nevertheless, Bolivia has established business relations with international corporations, initially with the Chinese company CATL. This company is also building a battery factory in Hungary. This company already operates a battery factory in Germany, in Thuringia. And so Bolivian lithium will certainly also be exported to Europe. The Europeans can therefore not say that it only goes to China!
  A second company is the Uranium One Group from Russia. It is a Russian company that was awarded the contract this year to mine lithium together with the Bolivian state-owned company YLB (Yacimientos de Litio Bolivianos). This was announced at the end of June 2023. Despite all the pressure from the USA and the international press, the Bolivian government stood its ground and said: We will award the contract to whoever adapts to our ideas, and if we see that Russia has made a good offer, then we will go for it. And I am very pleased to announce this here. I was delighted to hear the news! The third company is Citic Guaon/Crig from China. These three companies have been awarded the contract to work together on lithium exploitation. And why did Bolivia do this despite the constitutional article? Because Bolivia needs the market for lithium, because Bolivia needs the know-how for lithium mining and because Bolivia also needs know-how for the value chain.
  The first special feature of the Bolivian model is that it is 100% under the control of the state, as emphasised by Bolivia’s vice minister. The international companies are service providers with the right to be the preferred customer for lithium purchases. I want to emphasise this, because the question is always asked: what is the benefit of cooperation for the international companies if the lithium belongs 100% to the Bolivian state? These companies have a right of first refusal for lithium and thus the first access to this “critical” raw material in a country where large resources are available. They have thus secured one of their supply chains.
  There are agreements at the moment, but no contracts with the companies yet. There is still a long way to go before they are legally finalised.
  The second special feature of this model is that the international corporations will also invest in the value chain. They will not only be involved in the exploitation of lithium and simply buy lithium, but have also committed to investing in the value chain.

Low water consumption
due to direct lithium extraction

Thirdly, international corporations are not only open to technology transfer, but must also actually implement it, for example in the case of direct lithium extraction (DLE) technology. Water loss is very different when using the two technologies. When using evaporation ponds, 200 m³ (200,000 liters) of brine are evaporated per ton of LCE (lithium carbonate equivalent). With the DLE method, the net water consumption is only 2 m3 (2,000 liters) per ton of LCE, i. e., 100 times less (https://ctlithium.com/about/direct-lithium-extraction/).
  This technology is well known in Germany. In the Upper Rhine Graben in southwest Germany, a huge lithium deposit is said to be floating in thermal water deep underground. This hot water is also used to supply district heating networks. The Australian company Vulcan Energy is involved in projects here. With a system for optimising lithium extraction, the lithium is practically separated from the hot water and the water then flows back into the ground. The lithium chloride produced in this way is further processed in a plant for optimising lithium electrolysis, resulting in lithium hydroxide. A similar technology will be used by the aforementioned international companies in Bolivia’s salt lakes, with different results of course. Bolivia has a research team and is working on its own patents, including for DLE technology.
  In the meantime, Bolivian scientists have developed their own patents for the extraction of lithium carbonate. That is very good.
  CATL will use this technology to extract 25,000 tons from the Uyuni Salt Lake and 25,000 tons from the Coipasa Salt Lake. Citic Guaon/Crig will also work with this technology in the northern part of the Uyuni Salt Lake and is expected to produce 2,000 tons. Russia will also exploit 25,000 tons from the Pastos Grandes Salt Lake using this technology. The plan is to produce a total of 100,000 tons by 2025.
  Bolivia started its lithium project back in 2009 and has now moved from a pilot plant to its own industrial plant, which is expected to produce 15,000 tons a year. They haven’t got that far yet, but that is the goal.
  As far as the value chain is concerned, it is known that the industrialised countries and industrial groups involved in lithium achieve the greatest profit in cathode production, cell and battery production. The chief economist at Repsol, Antonio Medina, estimates that material costs account for 90% of the total value of a battery, with cathodes and anodes accounting for 75%. The international companies in Bolivia have now committed to investing in these areas as well. This is good news for Bolivia and for Latin America. We recently read in the press that the Chinese only wanted to exploit lithium for their own purposes like the Europeans and North Americans. That is simply a lie. No, in this case the Bolivians have insisted that they have to earn money from it themselves. This is news that signals the beginning of the end of brutal colonialism and neo-colonialism.

Lithium mining in Argentina and Chile

Now a comparison with the state model in the other countries, Chile and Argentina. There are currently two large private companies in Chile: Abermale from the USA and SQM (Sociedad Química y Minera de Chile S. A.) from Chile. The latter is made up of two companies: from Chile and China. According to the literature, the Chilean entrepreneur is Pinochet’s son-in-law. The Chinese company Tianqi Lithium has a 22.77% stake in SQM. The collaboration began in 2018.
  There are several international companies working on lithium extraction in Argentina. These include Alkem (Australia), Livent (USA), Lithium Americas (Canada), Posco (South Korea) and Ganfeg-Lithea (China). Three projects are currently producing: that of Livent in the province of Catamarca, that of Orocobre Ltd and Toyota in Jujuy and that of Exar (Lithium Americas and Ganfeng) also in the province of Jujuy. It is not the states that are the real exporters, but the companies that export lithium from these countries. The largest buyers of this lithium are Asia, i.e. China, Japan and South Korea. This is where the technological development in this field is taking place – not in the USA and not in Europe. We Europeans need to realise this. Many still believe that we are at the cutting edge of scientific development. Unfortunately, this is not the case; we still have a lot of work to do and, above all, we need to put an end to neo-colonialism.

The state also has a say
in Argentina and Chile

Nevertheless, I would like to make a few qualifications with regard to the predominance of private companies and would like to point out the state involvement of Argentina and Chile. Argentina has left a window open for this by firstly enforcing that international companies must provide a percentage of 5–20% of production for industrial production in Argentina. A small state-owned company called Y-TEC was founded for this purpose. It is to produce cells and batteries. This battery production is to be made available for cars in Argentina, including in rural areas. Argentina is a huge country, and if you want to have energy, you have to connect the central energy supply with the remote locations. This is expensive, but with battery production and solar systems, it can be done quickly. This part has been developed in Argentina. I hope that this will continue to develop. Argentina doesn’t want to go any other way.¹
  In addition, the Argentine model provides for provincial governments to participate in the projects of international corporations to the tune of around 3–8%. This is very little, but the central government of Argentina is not satisfied with this. This is because it runs counter to the interests of the state as a whole that the governors of these provinces want to do it themselves. There is strong protest from the indigenous population, they don’t want that, they want the water and land there to remain untouched. There are major conflicts in the provinces.
  In the case of Chile, there is great hope at the moment, as the current Boric government announced its national lithium strategy in February. Boric has said that from 2030, the two international companies mentioned will participate in the state-owned company as a kind of joint venture with a 51% share for Chile and 49% for the companies. There was and still is a lot of shouting from the neoliberals, Chile has a tradition of neoliberalism since Pinochet, but the head of government has said clearly: as long as I, Boric, am in government, the lithium will not benefit individual companies or individuals, but it must belong to all Chileans. Just as the Mexican president has announced: This strategic raw material must benefit all Mexicans. In this case, all Chileans too.
  Chile’s national lithium strategy also stipulates that international companies should invest in the value chain, similar to Bolivia. In addition, the aim is that international companies should also work with the new DLE technology, direct lithium extraction, due to the loss of water. Thank you for your attention.  •

¹ On 22 September 2023, after my presentation, amerika21 announced: “The subsidiaries of the state-owned oil company YPF, Y-Tec and YPF Litio, have now signed a letter of intent with Düsseldorf-based Eusati GmbH to advance state-owned lithium production and processing.”

(Translation Current Concerns)

* Dr Muruchi Poma, born in Bolivia in 1950, studied economics in Leipzig and completed his doctorate in 1985 on the subject of José Marti’s revolutionary democratism. Publisher of the electronic newsletter Tani Tani in Spanish. Since 2011 chairman of the Leipzig association “Ayni – Association for Resource Justice”. Publications: “Evo Morales – the biography” 2007, “Ponchos Rojos” 2008 and “Qhapaq Ñan y Socialismo”.