[News] After Evo, the Lithium Question Looms Large in Bolivia

[Anti-Imperialist News]

https://www.counterpunch.org/2019/11/13/after-evo-the-lithium-question-looms-large-in-bolivia/ 



  After Evo, the Lithium Question Looms Large in Bolivia

by Vijay Prashad <https://www.counterpunch.org/author/drespu/>
------------------------------------------------------------------------

Over the past 13 years, Morales has tried to build a different 
relationship between his country and its resources. He has not wanted 
the resources to benefit the transnational mining firms, but rather to 
benefit his own population. Part of that promise was met as Bolivia’s 
poverty rate has declined, and as Bolivia’s population was able to 
improve its social indicators. Nationalization of resources combined 
with the use of its income to fund social development has played a role. 
The attitude of the Morales government toward the transnational firms 
produced a harsh response from them, many of them taking Bolivia to court.

Over the course of the past few years, Bolivia has struggled to raise 
investment to develop the lithium reserves in a way that brings the 
wealth back into the country for its people. Morales’ Vice President 
Álvaro García Linera had said that lithium is the “fuel that will feed 
the world.” Bolivia was unable to make deals with Western transnational 
firms; it decided to partner with Chinese firms. This made the Morales 
government vulnerable. It had walked into the new Cold War between the 
West and China. The coup against Morales cannot be understood without a 
glance at this clash.

*Clash With the Transnational Firms*

When Evo Morales and the Movement for Socialism took power in 2006, the 
government immediately sought to undo decades of theft by transnational 
mining firms. Morales’ government seized several of the mining 
operations of the most powerful firms, such as Glencore, Jindal Steel & 
Power, Anglo-Argentine Pan American Energy, and South American Silver 
(now TriMetals Mining). It sent a message that business as usual was not 
going to continue.

Nonetheless, these large firms continued their operations—based on older 
contracts—in some areas of the country. For example, the Canadian 
transnational firm South American Silver had created a company in 
2003—before Morales came to power—to mine the Malku Khota for silver and 
indium (a rare earth metal used in flat-screen televisions). South 
American Silver then began to extend its reach into its concessions. The 
land that it claimed was inhabited by indigenous Bolivians, who argued 
that the company was destroying its sacred spaces as well as promoting 
an atmosphere of violence.

On August 1, 2012, the Morales government—by Supreme Decree no. 
1308—annulled the contract with South American Silver (TriMetals 
Mining), which then sought international arbitration and compensation. 
Canada’s government of Justin Trudeau—as part of a broader push 
<https://www.thetricontinental.org/wp-content/uploads/2019/04/190430_Briefing_Mining_Final_Web.pdf>on 
behalf of Canadian mining companies in South America—put an immense 
amount of pressure on Bolivia. In August 2019, TriMetals struck a deal 
with the Bolivian government for $25.8 million, about a tenth of what it 
had earlier demanded as compensation.

Jindal Steel, an Indian transnational corporation, had an old contract 
to mine iron ore from Bolivia’s El Mutún, a contract that was put on 
hold by the Morales government in 2007. In July 2012, Jindal Steel 
terminated the contract and sought international arbitration and 
compensation for its investment. In 2014, it won $22.5 million from 
Bolivia in a ruling from Paris-based International Chamber of Commerce. 
For another case against Bolivia, Jindal Steel demanded $100 million in 
compensation.

The Morales government seized three facilities from the Swiss-based 
transnational mining firm Glencore; these included a tin and zinc mine 
as well as two smelters. The mine’s expropriation took place after 
Glencore’s subsidiary clashed violently with miners.

Most aggressively, Pan American sued the Bolivian government for $1.5 
billion for the expropriation of the Anglo-Argentinian company’s stake 
in natural gas producer Chaco by the state. Bolivia settled for $357 
million in 2014.

The scale of these payouts is enormous. It was estimated 
<https://www.ft.com/content/c1ae0c29-b834-3954-b639-685ddabf2c22> in 
2014 that the public and private payments made for nationalization of 
these key sectors amounted to at least $1.9 billion (Bolivia’s GDP was 
at that time $28 billion).

In 2014, even the /Financial Times/ agreed 
<https://www.ft.com/content/c1ae0c29-b834-3954-b639-685ddabf2c22> that 
Morales’ strategy was not entirely inappropriate. “Proof of the success 
of Morales’s economic model is that since coming to power he has tripled 
the size of the economy 
<https://www.ft.com/content/f04f7a4a-36be-349e-8165-291c4e10a8c2> while 
ramping up record foreign reserves.”

*Lithium*

Bolivia’s key reserves are in lithium, which is essential for the 
electric car. Bolivia claims to have 70 percent of the world’s lithium 
reserves, mostly in the Salar de Uyuni salt flats. The complexity of the 
mining and processing has meant that Bolivia has not been able to 
develop the lithium industry on its own. It requires capital, and it 
requires expertise.

The salt flat is about 12,000 feet (3,600 meters) above sea level, and 
it receives high rainfall. This makes it difficult to use sun-based 
evaporation. Such simpler solutions are available to Chile’s Atacama 
Desert and in Argentina’s Hombre Muerto. More technical solutions are 
needed for Bolivia, which means that more investment is needed.

The nationalization policy of the Morales government and the 
geographical complexity of Salar de Uyuni chased away several 
transnational mining firms. Eramet (France), FMC (United States) and 
Posco (South Korea) could not make deals with Bolivia, so they now 
operate in Argentina.

Morales made it clear that any development of the lithium had to be done 
with Bolivia’s Comibol—its national mining company—and Yacimientos de 
Litio Bolivianos (YLB)—its national lithium company—as equal partners.

Last year, Germany’s ACI Systems agreed to a deal with Bolivia. After 
protests from residents in the Salar de Uyuni region, Morales canceled 
that deal on November 4, 2019.

Chinese firms—such as TBEA Group and China Machinery Engineering—made a 
deal with YLB. It was being said that China’s Tianqi Lithium Group, 
which operates in Argentina, was going to make a deal with YLB. Both 
Chinese investment and the Bolivian lithium company were experimenting 
with new ways to both mine the lithium and to share the profits of the 
lithium. The idea that there might be a new social compact for the 
lithium was unacceptable to the main transnational mining companies.

Tesla (United States) and Pure Energy Minerals (Canada) both showed 
great interest in having a direct stake in Bolivian lithium. But they 
could not make a deal that would take into consideration the parameters 
set by the Morales government. Morales himself was a direct impediment 
to the takeover of the lithium fields by the non-Chinese transnational 
firms. He had to go.

After the coup, Tesla’s stock rose astronomically.

/This article was produced by //Globetrotter/ 
<https://independentmediainstitute.org/globetrotter/>/, a project of the 
Independent Media Institute./

-- 
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