Five pressing questions for the future of lithium mining in Bolivia

Five pressing questions for the future of lithium mining in Bolivia

  • As the Bolivian government negotiates business dealings with foreign lithium companies, questions remain about the future of local desert ecosystems and the Indigenous communities that steward them.
  • Lithium extraction, often used for lithium-ion batteries, has been known to deplete and contaminate freshwater, impacting wildlife populations and the livelihoods of residents who rely on tourism and salt mining.
  • While many community leaders in Bolivia are hopeful they can avoid similar pitfalls in the early stages of development, others are worried that foreign interests will once again exploit the country’s natural resources, leaving many residents in poverty.

COLCHANI, Bolivia — Bolivia is taking another shot at lithium investment. After decades of stalled projects and soured relationships with international investors, the central government, under left-wing President Luis Arce, is evaluating offers from six overseas mining companies eager to help the country set up a monopoly on the world’s largest deposit of untapped lithium.

The focus is the Uyuni salt flat and other desert areas in the department of Potosí in the southwest, where the U.S. Geological Survey estimates there are 21 million tons of lithium. Argentina, with 19 million tons, has the second-most in the world, followed by Chile with 9.8 million tons. Together, the three countries make up what’s known as the “Lithium Triangle.” But so far, only Argentina and Chile have cashed in on the potential.

The two countries have been among the world leaders in lithium production over the past several years, along with Australia and China, as demand for lithium-ion batteries continues to rise. Last year, Chile produced around 26,000 tons of lithium. Argentina has gone on a global campaign recently to solicit additional investment in its own lithium industry.

Bolivia, meanwhile, has botched most attempts to build up a thriving industry of its own. Foreign investors have been hesitant to work with the central government, which nationalized lithium in 2008 despite, critics said, lacking much of the necessary technology and expertise. One of the few companies that struck a deal with the state-owned Yacimientos de Litio Boliviano (YLB) — which companies must partner with to mine lithium in Bolivia — pulled out of the country in 2019 amid protests.

Residents are worried about the environmental impact that future lithium development might bring if the central government, operating hundreds of miles away in the capital, La Paz, decides to prioritize the needs of foreign companies over those of local communities. Other residents, though, are hopeful investment will be done right this time, shepherding in a new era of wealth for some of the poorest people in the country.

The debate has become increasingly polarized as the government deepens talks with the six companies. The future will hinge on key questions about ethical business practices, the environment, and the role of local stakeholders.

1. Can the Bolivian government forge a healthy relationship with foreign investors or will negotiations fall apart again?


For decades, Bolivian officials have been pointing to lithium as the country’s way out of poverty. It was called the future engine of the national economy by former vice president Álvaro García Linera and a way of stabilizing the middle class. Evo Morales, the former socialist president who served from 2006 to 2019, nationalized the industry, promising that foreign interests wouldn’t plunder Bolivia’s natural resources as they had in the past. Instead, he said, lithium would propel the country to the status of a world power. So far, that hasn’t happened.

Morales didn’t just want to export lithium, though; he wanted to produce batteries and cars for export. This complicated deals with potential investors from France, Japan, Russia and South Korea, none of which came to fruition because, among other things, they were required to take on YLB as an equal partner. The problems have only gotten worse since then.

One of the only successful lithium projects, the Llipi pilot plant, was launched by the Morales government in 2009 but took six years to ship its first batch of lithium. The company helping oversee the plant, Germany’s ACI Systems Alemania (ACISA), eventually pulled out of the country in 2019 after protests erupted across Potosí department over unsatisfactory royalties for local communities and the negative environmental impacts allegedly being ignored by the government.

President Arce has tried to keep those controversies in the past. When he took office in late 2020, he promised to make lithium a multibillion-dollar industry by supplying nearly half of the global demand and setting up an electric vehicle production hub. One of the first steps to achieving that goal will be finishing talks with the six companies that want to partner with YLB. After that, the challenge will be keeping the winning company in Bolivia long enough to actually see development through.

Residents are concerned that lithium mining could contribute to water scarcity. (Photo by Maxwell Radwin/Mongabay)

2. Can Bolivia’s lithium operations learn from the environmental mistakes of past projects or will they leave desert habitats in ruins?


In Chile, the lithium industry, years ahead of Bolivia’s, has pitted residents against the government and mining firms in a fight for access to clean water. Producing a ton of lithium through brine extraction and treatment requires nearly 2,000 tons of water, according to the U.N. Conference on Trade and Development, and the little that remains can often be contaminated.

Negotiations between Indigenous communities and Chilean mining companies like SQM have floundered in recent years as residents resist offerings — including $15 million in annual contributions to “sustainable development” efforts — that they see as missing the point: extractive activities, they say, shouldn’t be compromising local ecosystems. Some Chilean residents even reportedly refer to their salt flats as a “sick patient” in need of healing.

In Bolivia, communities near the Uyuni salt flat have been paying attention to Chile’s lithium struggles. They know the potential pitfalls and how the environment will be affected if operations are carried out haphazardly. That’s why, as the government evaluates the six companies vying for a partnership with YLB, local leaders are busy writing up environmental protection standards. “We want to know exactly how much water will be required [to carry out mining operations],” said Yamileth Cruz Tejerina, executive secretary of the Single Regional Federation of Rural Workers of the Southern High Plains, an organization that is helping draft local regulations for the lithium industry.

Cruz said she expects there to be water treatment plants to prevent contamination from harming residents and local wildlife. (A March study found that impacts on the watershed of Chile’s Atacama Desert negatively impacted flamingo populations.) She also expressed concern about waste removal once lithium mining draws an increasing number of people to the area.

Of the six companies vying for the tender, four are Chinese (CATL/CMOC, CITIC Guoan/CRIG, Fusión Enertech, and Xinjiang TBEA Group), one is from the U.S. (Lilac Solutions), and one is Russian (Uranium One Group). None of the companies responded to a request for comment for this story. But all of them, on their websites, say they prioritize high environmental standards. Until they can prove that on the ground, it will be hard to convince residents who aren’t so sure that’s the case.

3. Will local and Indigenous communities benefit from lithium investment or will they get left behind?


The town of Colchani sits practically on the edge of the Uyuni salt flat. Residents there can walk to it if they want, selling souvenirs to visitors or giving tours. The salt flat is the primary economic driver for the town and the neighboring city of Uyuni, about 22 kilometers (13 miles) away. Salt sellers, many organized into unions, make a living collecting the salt, helping process and package it and selling it to larger distributors in other parts of the country.

Lithium mining could be a threat to those jobs, residents say. If brine operations contaminate the salt flat, then there won’t be clean salt to sell. Tourists won’t visit because the wildlife will be driven out. It will be too hard to support even the local population because of the water shortages.

Tourism operators told Mongabay they would not only lose their businesses but have to relocate to other parts of the country. Without the salt flat, they said, there are few ways to make a living in the desert. The area has some zinc and silver mines, as well as quinoa cultivation and cattle ranching, but there isn’t enough work outside the salt flat to support everyone. “The first few years we’re not going to notice it,” said Luis Basta, a tourism agent in Uyuni. “But with time, and the passing of the years, it’s going to affect us. It’s going to affect tourism.”

Salt for sale in Colchani, Bolivia. (Photo by Maxwell Radwin/Mongabay)

Uyuni’s municipal government is banking on lithium being a tourism draw in itself. Eusebio López Martínez, the city’s mayor, imagines impressive, modern facilities that visitors will be willing to pay for tours of. But he also admitted no one, government officials included, has much experience developing advanced lithium extraction, making it hard to know what will work. “We can’t predict what might happen,” he said.

What virtually everyone agrees on is that a thorough consultation process, in which the government and investors meet with local communities to discuss the parameters of development, is the only reliable way to protect all of the interests at stake in the region. In Bolivia the process is called socialización, and critics and supporters alike are clamoring to influence how it’s carried out. “[Socialización] is the first thing we want,” said Walter Yuca Flores, the chief magistrate of Colchani. “That the companies coming to work here also take us into account in terms of direct and indirect jobs.”

Yuca is also hoping to secure royalties for his community, such as funds for building schools, roads and other public infrastructure. When it comes to mining, the country has a fraught past with roots in colonial exploitation, and no one wants to get cheated this time around.

Two hundred kilometers (125 miles) northeast of Uyuni, the Spanish founded the city of Potosí because of the Cerro Rico, or “rich hill,” to this day one of the country’s largest silver deposits. And Mongabay has found that Chinese and Colombian investors profit from lax gold mining regulations in the northern department of La Paz. Communities are relying on the prior consultation process to ensure that the wealth generated from lithium actually stays in Bolivia.

“They’ve taken silver from us to build a bridge from Potosí to Spain,” Roxana Cecilia Graz Iporre, the acting president of the Potosinista Civic Committee (Comcipo), told Mongabay. “They’ve taken our zinc from us. They’ve taken our tin. And what condition are we in? We’re in deplorable conditions. Poverty.”

4. Will local communities accept unfavorable royalties or will they launch another protest movement?


Uyuni Mayor Eusebio López Martínez told Mongabay he’s had little to no communication with the central government. Although local officials like him more closely represent the people likely to be most affected by lithium mining, they don’t have a say in, or even an awareness of, the ongoing tendering process.

As a result, several interest groups are preparing bills that lay out how different levels of government would coordinate oversight of the lithium industry. Some of the bills are more ambitious than others. Comcipo’s bill, for example, wants to decentralize lithium, moving relevant government offices from the capital to Potosí, where the extraction is actually taking place.

Stakeholders in the department, a conservative stronghold, are especially uneasy about the left-wing central government and its role in lithium extraction. And they’ve demonstrated a willingness to interrupt progress if the wealth generated from lithium looks like it won’t be fairly governed and disturbed. “[The government] talks personally with this or that company but without understanding how they will collaborate on development, without knowing whether they have the technology or fully knowing what these companies are going to do,” said Graz, the Comcipo acting president.

A community meeting on lithium mining in Uyuni, Bolivia. (Photo by Maxwell Radwin/Mongabay)

In 2019, when the government was partnering with ACISA, the German company, protests erupted in Potosí over inadequate royalties for local communities that had been pitched lithium as their ticket out of poverty. Protesters blocked roads and threw explosives at authorities. Comcipo was one of the organizers of the movement, and many of its leaders, including Marco Antonio Pumari, went on hunger strike.

The protests lasted for months and carried on into the 2019 presidential election campaign. Pumari and other leaders would eventually be arrested for allegedly burning down an electoral office. Today, Pumari remains in a prison on the outskirts of Potosí. When Mongabay visited his jail cell in September, he was meeting with a city official and coordinating business on a cellphone — a privilege arranged with the prison guards.

Comcipo and other interest groups continue to work on potential legislation to protect environmental and human rights interests. But they’re also poised to arrange the necessary protests should legislation break down. “We have the strength to be fighters,” Graz said. “We have always been in the streets and we’re going to continue fighting.”

5. Who will control future negotiations with lithium mining companies?


Although the controversies surrounding lithium mining have largely been framed as local communities versus exploitive overseas companies, an internal power struggle is also shaping the landscape of lithium mining in Bolivia. Different communities want different things. And even more so, different communities want to be the ones at the negotiating table.

The laws being drafted by groups in Uyuni look different than the one proposed by Comcipo in Potosí, but both try to pull power away from the central government and closer to their own areas of influence. While Comcipo is trying to keep the decision-making in the department’s capital city, officials in Uyuni see their jurisdiction as the more relevant stronghold. “We are organizing ourselves,” said López Martínez, the Uyuni mayor. “We are already on that path.”

Bolivian law allows lower levels of government to declare autonomy from the central government, in this case setting up a municipal governing body representing the eight jurisdictions around the Uyuni salt flat. In theory, this would give the most affected residents more control over environmental regulations, jobs and royalties from lithium companies.

Tarija, in the very south of the country, obtained regional and municipal autonomy in 2008 to have more control over oil and gas extraction. But Comcipo said this hasn’t been the answer. “They haven’t grown at all,” Graz said of Tarija. “They’re in the same miserable conditions.”

Autonomy will be hard to achieve. Tarija’s autonomy only came amid great political instability and hasn’t been replicated in the country since. And it’s too early to know if any other bills and regulatory proposals will actually stick. The ones that do, though, could decide who gets to speak on behalf of the environment and local communities for years to come.

Banner image:  The salt flats of Uyuni in Potosí, Bolivia. Photo by Maxwell Radwin/Mongabay.

Citation: Gutiérrez, J. S., Moore, J. N., Donnelly, J. P., Dorador, C., Navedo, J. G., & Senner, N. R. (2022). Climate change and lithium mining influence flamingo abundance in the Lithium Triangle. Proceedings of the Royal Society B289(1970), 20212388. doi:10.1098/rspb.2021.2388

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This story first appeared on Mongabay

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