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<div class="header reader-header reader-show-element" dir="ltr"> <font
size="-2"><a class="domain reader-domain"
href="https://www.counterpunch.org/2019/11/13/after-evo-the-lithium-question-looms-large-in-bolivia/">https://www.counterpunch.org/2019/11/13/after-evo-the-lithium-question-looms-large-in-bolivia/</a></font>
<h1 class="reader-title">After Evo, the Lithium Question Looms
Large in Bolivia</h1>
<span class="post_author_intro">by</span> <span
class="post_author" itemprop="author"><a
href="https://www.counterpunch.org/author/drespu/"
rel="nofollow">Vijay Prashad</a></span></div>
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<p>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.</p>
<p>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.</p>
<p><strong>Clash With the Transnational Firms</strong></p>
<p>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.</p>
<p>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.</p>
<p>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 <a
href="https://www.thetricontinental.org/wp-content/uploads/2019/04/190430_Briefing_Mining_Final_Web.pdf">broader
push</a>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.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>The scale of these payouts is enormous. It was <a
href="https://www.ft.com/content/c1ae0c29-b834-3954-b639-685ddabf2c22">estimated</a>
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).</p>
<p>In 2014, even the <em>Financial Times</em> <a
href="https://www.ft.com/content/c1ae0c29-b834-3954-b639-685ddabf2c22">agreed</a>
that Morales’ strategy was not entirely inappropriate.
“Proof of the success of Morales’s economic model is
that since coming to power he <a
href="https://www.ft.com/content/f04f7a4a-36be-349e-8165-291c4e10a8c2">has
tripled the size of the economy</a> while ramping up
record foreign reserves.”</p>
<p><strong>Lithium</strong></p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>After the coup, Tesla’s stock rose astronomically.</p>
<p><em>This article was produced by </em><a
href="https://independentmediainstitute.org/globetrotter/"><em>Globetrotter</em></a><em>,
a project of the Independent Media Institute.</em></p>
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