The Race for Lithium in Latin America

The immense puzzle of turquoise pools contrasts with a salt desert that seems infinite, a recurring landscape in the confines of Chile, Argentina and Bolivia, where the “lithium triangle” brings together hope, fear and disillusionment.

This arid triple border of South America treasures in subway brine deposits 56% of the world’s identified resources of the coveted metal that gives life to cell phones, computers and automobiles.

The so-called “white gold” or “oil of the 21st century” has seen its price soar from $5,700 a ton in November 2020 to $60,500 last September thanks to the boom in electric vehicles, as the world seeks to move away from fossil fuels to curb global warming.

But the dark side of lithium is that each plant consumes millions of liters of water per day and farming communities in this drought-stricken corner of South America fear for their livelihoods.

The Best Salt Flat

The lithium route begins in northern Chile. From the Atacama salt flat, a brown, rocky plain you can barely walk on, 26% of the world’s production came out in 2021, according to the U.S. Geological Survey (USGS).

The figure was second only to Australia, with 55%, but extracted from rocks. In Atacama, trucks zigzag between pools where the brine, a mixture of water and salts, slowly evaporates before being taken to a chemical plant to separate the lithium from the liquid.

“It is by far the best salt flat in the world,” Juan Carlos Guajardo, said director of the consulting firm Plusmining. 

Chile, where lithium has been extracted since 1984, does it faster than its neighbors because the scarce rainfall and extreme solar radiation accelerate evaporation.

But its laws make it difficult to grant exploitation concessions since the dictatorship of Augusto Pinochet (1973-1990) declared it of “nuclear interest” for its use in the manufacture of hydrogen bombs.

The rights are in the hands of the U.S. company Albemarle and Chile’s SQM, which pay royalties of up to 40% of sales, as well as millions of dollars to neighboring communities.

In the first semester of this year alone, the tax revenue from lithium surpassed that of copper, popularly known as “Chile’s salary”.

Faced with such a boom, the leftist President Gabriel Boric promised to create a national lithium company, but without excluding private participation.

Dead Flamingos

Despite the agreements reached with the Atacameño peoples, some still see lithium as a threat. 

This year, a study in the journal Proceedings of the Royal Society B linked lithium mining to a drop in the number of flamingos in the Atacama.

“The development of technologies to curb climate change has been identified as a global imperative. However, these ‘green’ technologies can have a negative impact on biodiversity,” the study asserts.

In 2013, an inspection of SQM found that a third of the carob trees on the property had died. The probable cause, according to a subsequent study, was the lack of water.

The company reported using about 400,000 liters per hour this year.

“We want to know, for sure, what has been the real impact of the extraction of water from the groundwater,” says Claudia Pérez, 49, a resident of the San Pedro river valley and a worker in a state program to support indigenous communities. 

She is not against lithium, but demands “to minimize the negative impact on the people”.

We Can’t Eat Lithium

On the other side of the Andean puna, the road winds between Olaroz, Cauchari and other salt flats in the Argentine provinces of Jujuy, Salta and Catamarca, home to the second largest lithium deposit in the world.

With few restrictions for its exploitation and royalties of only 3%, Argentina is the fourth largest producer in the world with two mines: the American company Livent has had one since the 1990s and the other, more recent, is a partnership between Australia, Japan and an Argentine public company.

Dozens of projects of American, Chinese, French, South Korean and local firms mean that Argentina, in the midst of a serious economic crisis, plans to extract more lithium than Chile by 2030.

According to Roberto Salvarezza, president of the state-owned companies YPF-Litio and YPF-Tec, production would increase fivefold by 2025.

The governor of Jujuy, Gerardo Morales, even invited in April via Twitter the leader of the electromobility giant Tesla, U.S. magnate Elon Musk, to invest in the province when he complained about the high price of lithium.

But in Salinas Grandes, a desert between Salta and Jujuy, visitors come across a sign that says: “No to lithium, yes to water and life”. In 2019, its inhabitants expelled two mining companies that intended to settle in the area. 

“It is not, as they say, that they are going to save the planet…. We have to give our lives to save the planet,” says Verónica Chávez, president of the indigenous Kolla community Santuario de Tres Pozos, next to Salinas Grandes.

“We don’t eat lithium, neither do we eat batteries. We do drink water,” adds Chávez, 48, standing in front of mountains of salt extracted by a local cooperative.

A few meters away, Bárbara Quipildor, 47, assembles empanadas in a small construction made of salt.

“I want them to leave us alone, in peace. I don’t want the lithium, even though I know there is a lot of money,” she says.

“The future of my children’s children is the concern”.

Lithium Hotel

Some 300 km north of Jujuy, the Uyuni salt flat in Bolivia holds more lithium than any other: a quarter of the Earth’s identified resources, according to USGS.

It is in Potosí, a region rich in silver and tin that for centuries drove the economy of the Spanish empire. But today, more than half of Potosí’s inhabitants are poor.

At the beginning of his term, former leftist President Evo Morales (2006-2019) nationalized hydrocarbons and other resources, including lithium.

“Bolivia is going to set the price for the whole world,” Morales went so far as to say, who has called on the rest of the region to follow his example and that of Mexico, where lithium was nationalized in April.

His words brought hope to Rio Grande, a small town of dirt roads near the plant of the state-owned Yacimientos de Litio Bolivianos (YLB). Full of optimism, Donny Alí built his Lithium Hotel there.

But prosperity is not coming and Bolivia still does not produce the metal on an industrial scale.

“Our communities are forgotten. We were expecting a great industrial technological development and, above all, better living conditions. That hasn’t come,” laments Alí, a 34-year-old lawyer, sitting on a sofa in the hotel with no guests.

After years of stagnation, the leftist government has opened up to private participation, but it is not known how it will be implemented because the law prohibits it.

“There are those who are of the opinion that Bolivia is ‘going to miss the train’ of lithium. I think that is not going to happen,” Juan Carlos Zuleta, an economist specializing in lithium who headed YLB briefly in 2020, tells AFP.

The question, instead, is “whether that lithium extraction is going to benefit Bolivians.”

The Next China

Last year, a report by the Center for Strategic and International Studies in Washington attributed “unfavorable investment climates and more challenging geographic conditions” for Argentina and Bolivia lagging behind Chile in tapping their vast lithium resources.

Despite the differences, the three countries aim to go further and start manufacturing batteries.

Argentina is closer, with a pilot state-owned factory scheduled to begin operations in December. “South America has all the raw materials needed to produce batteries and electric vehicles,” explains Zuleta.

“This would mean a concrete possibility of turning South America into the next China,” he concludes. Meanwhile, the Lithium hotel remains empty and the communities of the salt flats are on the warpath for water.

Story by Martin Silva

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