Photo: AIZAR RALDES/AFP/Getty Images
By Isabel Vander Molen
Between 2015 and 2017 alone, demand for the mineral lithium increased 10 percent each year and prices for lithium nearly tripled, with global usage reaching 40,000 tons in 2017. This demand shows no signs of slowing, with Goldman Sachs predicting that for every one percent of electric vehicles that replace gasoline vehicles, lithium consumption will rise by 70,000 tons a year.
Over 50 percent of the worlds identified lithium reserves are in three South American countries, Chile, Argentina, and Bolivia. Of these, Bolivia has the most amount of lithium reserves in the world. However, its lithium production has not reached commercial viability. Lithium to Bolivia is regarded as a great asset for the country to become more globally competitive and bolster its economy. Unfortunately, capacity and financial restraints impede any significant development of lithium mines or processing centers.
For example, former Bolivian president Evo Morales’ lithium goal was to provide jobs for indigenous and rural Bolivians through lithium mining projects. However, initial lithium mining programs failed. Indigenous and rural people who would be laborers for lithium production projects near their land and communities face skill gaps that make it difficult to provide them lithium mining jobs. Additionally, some communities opposed lithium plant creation due to environmental concerns.
In the past, lithium deals fizzled out with Chinese and German prospective development partners. Currently, Bolivia does not have a dependable or consistent partner to help navigate and develop the programs and infrastructure needed to extract lithium at commercial levels.
Lithium deposits – especially those in Bolivia, Argentina, and Chile – are located in some of the driest places on earth, making them especially vulnerable to the effects of climate change. Bolivia in particular faces high levels of food insecurity and malnutrition. In the last 6 years Bolivia suffered from multiple droughts and floods. These trends are concerning when mining and processing lithium can further jeopardize food security through its excessive carbon emissions, water, and land use methods.
The most common lithium mining technique in salt flats is through brine extraction. Although this process is lower in CO2 emissions than hard rock mining, it requires excessive land and water use. Excessive water waste in the salt flat regions of each country affects local communities, particularly when concerns about drought and clean water makes food security an issue. Chile is the only country out of the Lithium Triangle group that has successfully made its lithium economically viable, despite having the least number of reserves compared to its neighbors. Unfortunately, studies done on Chile’s successful lithium mining points towards signs of environmental degradation.
In Chile, 500,000 gallons of water yields one ton of lithium. In areas that already struggle with clean water availability and accessibility, lithium water-mining techniques could cause local water basins to be contaminated and well as use an already scarce water supply used by rural communities, livestock, and crops. The damages of lithium mining may not be immediate, but Argentinian and Chilean mined land are showing signs of aquifer drainage, residual water contamination, and water dispossession. Likewise, lithium mines in Bolivia will affect local indigenous and rural farmers quality and access to critical resources. Already, reports from rural communities experiencing fish and livestock damage raise questions about the environmental impact of traditional lithium mining. Moreover, emerging lithium soil tests expose how the mining industry affects soil degradation and rural livelihoods in the Atacama salt flats.
If lithium mining projects are going to be pursued, there must be fair and thorough assessments of the effects on Bolivian agricultural production, especially since the sector is already susceptible to climate change. Traditional lithium brine extraction has demonstrated its early, yet probable harmful effects on agricultural and rural resources.
Now, lithium development through direct lithium extraction (or DLE) process is a national priority under Bolivia’s new president, Luis Arce. President Arce's national 2021-2025 agenda aims to pursue a rapid lithium development agenda. When speaking about the benefits of this plan in La Paz, Arce affirmed “This recovery obligates us to enhance our technology to get faster results, contrary to the industrial process for our lithium in our earlier draft plans that would not guarantee timely benefits.” DLE extraction can preserve over 98 percent of the water supply used for extraction. Pursuing this new extraction method is an optimal option for a more sustainable lithium mining industry in water-scarce areas.
Alone, Bolivia currently does not have the technical knowledge, infrastructure, and economic capacity to pursue expensive and extensive lithium extraction processes within the next decade. Without critical infrastructure, specialized personnel, or available technology, any lithium extraction projects put in place by Bolivia are likely to be inefficient or fail entirely. Ample funding, training, and good diplomacy are needed to achieve the levels of lithium extraction that will make it a significant export and asset to Bolivia’s economic growth. For that, foreign investors will be key.
In 2013, former president Morales formally expelled the U.S. Agency for International Development (USAID) due to allegations that USAID’s presence worked against Morale's government. Since USAID can no longer act as an intermediary for private investors, government, and NGOs, it is important to foster multistakeholder partnerships beyond USAID that can create a sustainable and mutually beneficial lithium mining industry in Bolivia.
Recently, EnergyX and MOBI Latam have expressed interest in partnering with Bolivia to pursue sustainable and cooperative lithium projects. Creating a dialogue between local populations, indigenous voices, the government, and foreign investors is necessary to choose the best path forward. Diplomacy skills and cooperation are critical for foreign investors to pursue innovative and creative lithium extraction plans with Bolivia, particularly if USAID can become involved again.
Today, China is the largest producer of lithium batteries. This puts the United States at an economic and security disadvantage when it comes to accessing vital minerals like lithium for commercial and security technology. Instead of attempting to pursue a lengthy and expensive effort of relying on nationally extracted and produced lithium batteries, the United States should instead invest in nearshoring supply chains from its lithium-rich neighbors in Bolivia, Argentina, and Chile. Its investments must be sustainable and work with local communities to ensure that the industry can be both sustainable and profitable, while creating opportunities for these countries to tap into the new age of clean energy development. Regional cooperation in Chile and Argentina is also important to start a process of near-shoring lithium battery supply chains, instead of creating onshore U.S. factories or continuing reliance on Chinese lithium exports. A regional cooperative effort diversifying lithium supply chains in the Lithium Triangle can be the first exercise in long-term infrastructure and development cooperation between Latin America and the United States.
Isabel Vander Molen is a research intern with the Project on Prosperity and Development at the Center for Strategic and International Studies.