How Bolivian lithium could fight climate change

How Bolivian lithium could help fight climate change

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THE SALAR DE UYUNISalt flat in southern Bolivia called. It is so large and white that you can see it even from the moon. It spans 10,000 km {+2} (4,000 square miles), roughly the area of Kosovo. The salt hexagons that make up the top layer are thick enough for Jeeps and igloos made from salt blocks to withstand their weight. Underneath, a layer of brine holds the world’s largest deposits of lithium, a light and volatile metal used in batteries for smartphones, computers and electric vehicles.

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These staples of modernity are rare in the rural areas around the Salar. Río Grande, a dusty village founded by quinoa farmers and llama herders, sits near its southern edge, 25km from a pilot plant for lithium carbonate (a processed form of the metal) that opened in 2013. Over the past decade, the village’s 2,000 or so residents have invested in lorries to serve the plant and built simple hotels for workers they expect to flock to the area any day now.

But although Chile has been extracting lithium since the 1980s and Argentina is set to rival its production by the end of the decade, Bolivia’s pilot plant will produce just 600 tonnes of lithium carbonate this year, generating less than $5m in sales (see chart). Chile and Argentina will produce 134,000 and 36,000 tonnes, respectively, this year. “We’re still waiting for the boom,” says Corina Alí Lupa, a union leader in Río Grande.

Still dreaming

After years of unmet goals and cancelled deals, lithium experts almost gave in to Bolivia. Simon Moores from Benchmark Mineral Intelligence, an international consultancy, said that recent pledges by carmakers, such as Ford and General Motors, to increase the production of electric cars have sparked a new scramble for the necessary minerals.

Between 2015 and 2020, lithium demand doubled to 360,000 tonnes per annum. Benchmark predicts that the demand for lithium will soon exceed supply by 240,000 tonnes. The lithium market is highly speculational. Previous predictions of shortages have been proven wrong due to the slow adoption of electric cars. The idea that plug-in cars will soon become mainstream has brought renewed interest to Bolivia. According to the, the country has 21m tonnes in resources. USGeological Survey. It could extract more, which would increase the global supply.

It’s a relief that Bolivia, after almost two years of political instability, and an economic crisis, has had a more business-friendly President since 2020. Luis Arce, a former finance Minister, indicated that he may be more open to foreign firms digging for minerals in return for their know-how and financing.

Benchmark was hired to assist Mr Arce in the development of a lithium plan. In April the government called for bids to help it develop a new technology called “direct lithium extraction” (DLE). It announced in July that nine companies would be conducting pilot tests in Salar. This could help the country make progress in its quest for industrialisation of lithium.

Extracting lithium in Bolivia can be difficult in many ways. Bolivia uses solar evaporation, which is used in Chile and Argentina to extract the metal. This involves digging several large pools, with the largest having a total area of 30 hectares. Evaporation aids in the isolation of different salts as the lithium-rich brine is transferred one pool to another. But according to Renan Soruco, a chemist at the Tomás Frías Autonomous University in Potosí, “every brine is unique.” And Bolivian brine has proved especially tricky thanks to its high level of magnesium (around 17 parts to every one of lithium, compared with 4:1 in Chile’s purer brine). Bolivia’s rainy season also slows down evaporation. The Uyuni plant is able to extract only 15-20% of the lithium in its brine, says David Rocha, the plant’s director. Chile’s efficiency rate is around 40%.

The bigger problem is political. Chile has two multinationals SQMAlbemarle and Albemarle have licences to extract lithium. Argentina’s 24 provinces are free to grant concessions (although only three have lithium projects); the latest went to Uranium One, a subsidiary of Russia’s state nuclear company. Bolivia, however, is still dominated Yacimientos de Litio Bolivianos.YLB), the state lithium company, which controls all of the extraction and processing at the Salar.

Evo Morales, a socialist, was the president of Bolivia from 2006 through 2019. Bolivian protectionism, which has always been strong, became more extreme under his leadership. Soon after Mr Morales was elected, he renegotiated natural gas contracts with foreign companies and instructed Mr Arce (then his finance minister) to devise an economic policy to redistribute the profits. In 2009, a new constitution expanded the state’s control over natural resources. A plan to industrialize lithium had mandated that the state supervise 100% of its extraction. Foreign partners were allowed to enter at the later stages.

Another problem is that some deals Mr Morales was willing make with foreign firms have been disapproved of by activists. Maison Engineering was employed by the government in 2018. CMECTwo Chinese companies have partnered with it to build an industrial-sized lithium carbonate plant that can produce 15,000 tons per year. It also signed a contract with ACISystems, a German company, to form a joint venture to produce lithium hydroxide (another component used in batteries), from the brine that remains after the evaporation process. Bolivia would own 51% of the company. ACIAlso, he agreed to assist in the construction of an industrial-scale battery station.

Many found the contract unfair in some aspects. It was to be in force for 70 years, which is a long time for technology still in development. Bolivia had 17% exclusive rights to the lithium hydroxide produced. The joint company would handle all sales in Europe, which meant that YLBCould not negotiate its own deals, and if it failed provide enough residual brine. ACICould sell some of its Lithium Carbonate. Activists in Potosí, the region in which the Salar salt flat is located, demanded higher royalties. “The government was deceiving the population,” says Marco Pumari, who carried out a week-long hunger strike in October 2019 against the deal. (The deal with ACIIt was eventually canceled.

After nationwide protests against a fraudulent election, Mr Morales was expelled in November 2019. Lithium extraction was neglected under the inexperienced interim government of President Jeanine Áñez, while covid-19 imposed further delays on production. The YLBIn the last two years, six presidents have been elected. Juan Carlos Zuleta, a Bolivian lithium expert, was fired three weeks after getting the top job in 2020 because of protests by Río Grande residents, who believed rumours that his consulting work for the Chilean government meant that he was acting for Chile. “A country that is constantly in conflict can’t develop,” he sighs.

It looks like the future

This tumultuous past is evident in the present. The YLBA turquoise pool emitted the scent of eggs when it was lit up at dawn on a weekday. This was a sign that the sulphates were evaporating. Only 96 of 160 pools currently have access to brine. Others are in need of repair and others are empty due a lack of industrial-sized pumps. The pilot plant for lithium carbonate has been open eight years. One step requires workers to squeeze the powder between their fingers to determine its consistency. The second involves two people rotating large metal tins of near-final product in front an electric heater.

From two to thousands

“We’re still stumbling a bit,” admits Mr Rocha, the director. He says he is under “a lot of pressure” to open the industrial-sized plant next year. It is currently made up of a steel shell. Experts warn that industrial production will require new processes and the purchase new machines to move from small-scale to large-scale production. Benchmark states that it takes seven years for lithium factories to reach full capacity.

There is a lot of hope in the tender for DLE. This method is more efficient than solar evaporation but also requires less water. This should make it more attractive to Salar residents, whose farmers are already under the effects of climate change. Franklin Molina Ortiz the minister of energy says that Bolivia will pursue a hybrid strategy in the short-term that will include both the evaporation plants and new technology. DLE methods. Some are skeptical of a government plan published earlier this year that states that the country will produce around 81,000 tonnes of lithium by 2025. 90% of this will come from. DLEThis is a relatively new technology. “This is impossible,” says Mr Zuleta.

Even though electric cars were not popular a decade ago, Thea Riofrancos, an economist at Providence College in Rhode Island, says that this is a far cry from the norm. Bolivia could make a huge business out of extracting lithium, even though it puts nationalism above efficiency.

Industrial-scale battery production is much harder to imagine, for reasons largely beyond the government’s control. Bolivia is landlocked with terrible roads. It would need to import many parts and export the batteries would be expensive, even dangerous. Even though it is unlikely, South America could create regional electric-vehicle supply networks, which could possibly include Bolivian batteries.

Much will depend on the medium-term demand. Benchmark doesn’t expect large quantities Bolivian lithium to reach markets until 2030. DLEIt will be more efficient.

Convincing Bolivia’s powerful campesinoThe challenge of finding unions and peasant farmer groups to support a project remains. Mayors from the Salar traveled to Germany earlier this month to meet with private companies that are interested in Bolivian lithium. This pleased residents of Río Grande, but irritated civic leaders in Potosí, who say they have been excluded from the government’s lithium plans.

A new law to regulate the lithium industry would be a good idea, perhaps with public consultation. This could set out rules for foreign participation in extraction, which is currently prohibited, and modify the royalty structure.

Ms Alí, the union leader, reckons that local mistrust of foreign investors is waning. She believes that most residents support Mr. Arce. They believe that increased production at the plant will improve infrastructure. One day, they hope to open a local university that offers degrees in science and tech, which will allow for more skilled jobs. She admits that these are only dreams for now. “But we haven’t given up hope.” ■

This article appeared under the headline “An salt and batteries” in the The Americas section.

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