THE FUTURE OF LITHIUM IN
BOLIVIA.
LITHIUM:
Every time we
pick up a cell phone or iPod, look at our watch, or plug-in a laptop we are
relying on batteries that contain lithium. It is also used in ceramics and
glass production, bi-polar medication, air conditioners, lubricants, nuclear
weaponry, and other products. The lightest metal on Earth, lithium is mined
from many sources, but most cheaply from underground brines like those found in
abundance under Bolivia’s vast Salar de Uyuni.
Today the global
focus on lithium is about its potential as a key ingredient in a new generation
of electric cars batteries with increasing reality of Peak Oil sink. Powerful
global players are investing billions of dollars in lithium’s future. Some
predictions speculate that lithium car battery sales could jump from $100
million per year to $103 billion per year in the next 2 decades. If so, the
countries that possess lithium are poised to become much bigger players in the
global economy.
Despite the
growing enthusiasm about lithium’s future, there are also real doubts as well.
The process for transforming lithium into its commercially valuable form,
lithium carbonate, is complex and expensive. The electric vehicle batteries
currently being developed with lithium are still too large and heavy, and too
slow to charge. The batteries are so expensive that they put the cost of
electric cars beyond the reach of most consumers. Lithium batteries also have a
record of catching fire. So while lithium car batteries might become a massive
global market, they could also turn out to be the energy equivalent of the
8-track tape bringing along many social and environmental conflicts.
CASE STUDY OF
BOLIVIA:
Based
even on conservative estimates, Bolivia’s lithium reserves are the largest in
the world. The Salar de Uyuni, a 10,000 square kilometer (3,860 square miles)
expanse of salt-embedded minerals, located in Bolivia’s department of Southwest
Potosí, is ground zero for Bolivia’s lithium dreams.
Foreign
corporations and governments alike are lining up to court a Bolivian government
intent on getting the best deal possible for its people. Among the major
players are two Japanese giants, Mitsubishi and Sumitomo, the latter of which
already has a stake in the controversial San Cristobal Mine known for
contaminating the same region. The French electric vehicle manufacturer,
Bolloré, is also courting the Morales government, as are the governments of
South Korea, Brazil, and Iran.
The
Bolivian government has sketched out a general plan for the various phases of
its lithium ambitions, but many of the details of how all this will be done
have yet to be defined. To get its feet wet in the technical and economic
waters of lithium, the government of Bolivia has invested $5.7 million in the
development of a “pilot plant” at the edge of the Salar de Uyuni. The plant is
intended to test drive the steps in getting the lithium-rich brine out from
under the Salar’s crust and separating it into its distinct (and marketable)
parts. Based on the experience of this pilot plant, the government aims to then
construct a much larger industrial-scale plant, capable of producing up to
30,000 to 40,000 metric tons of lithium carbonate per year. This will be
followed by a third phase to produce marketable lithium compounds, which the
government plans to undertake in partnership with foreign investors.
To
get help in meeting the formidable challenges it faces, the government has
assembled a Scientific Advisory Committee (Scientific Research Committee for
the Industrialization of the Evaporitic Resources of Bolivia) comprised of
experts from universities, private companies, and governments, to give free,
and mutually beneficial, advice. The Government has plan to commit 900 million
Dollars to develop a state-run Lithium industry according to the Strategic Plan
for Lithium Industrialization unveiled by president Evo Morales on October 21
2010. According to this strategic plan, Bolivia will extract and process
lithium for commercial use on its own and is prepared to finance the entire
chain of production including a battery plant on Bolivian soil by 2014.
STAKEHOLDERS
AND CHALLENGES:
At
heart, Bolivia’s lithium ambitions are simple: to lift a people out of poverty
by squeezing the maximum benefit possible from a natural resource on the
cutting edge of global markets. But between where Bolivia sits today and where
it aims to go on its lithium highway there are major challenges that it will
need to face;
The
electric car battery market looks to be the most lucrative and the Morales
government wants it to be a 100% state affair. Also the government aim at local
lithium market such as glass and ceramics with a middle option of producing
batteries for watches, cell phones, iPods, laptops and other electronic
gadgets.
The
cost of building a lithium battery industry in Bolivia is the most peculiar of
the scenery. According to experts in the field about 200 millions dollars is
needed for the main plant. Another investment in terms of chemical industries
and huge infrastructure development will cost about 1 billion dollars according
to a Bolivian official. Because of this Bolivia is looking for serious
partnerships with investors, an approach that some local community groups do
not support. A great concern about the Bolivian lithium race is the
environmental impacts. The adequacy of Bolivia’s environmental
strategy for lithium development in Southwest Potosí is doubted by several
well-regarded Bolivian environmental organizations.
SOCIO-ENVIRONMENTAL
CONCERN:
The
adequacy of Bolivia’s environmental strategy for lithium development in Southwest
Potosí is doubted by several well-regarded Bolivian environmental organizations.
The development of lithium may bring about a major crisis to a region already
suffering from a serious water shortage, impacting Quinoa farmers, Llama
herders the region’s vital tourism and drinking water source. Contamination of
air, water and soil as a result of the toxic chemicals which will be needed to
process the lithium, an example is the Chili Solar de Atacama which today
describes a landscape scanned by mountains of discarded salt and huge canals
filled with blue chemically contaminated water. Bolivia official and ministry
of the Environment and Water which has dismissed those risks lack the capacity
or authority to intervene in an effective way.
Many groups in the region are in support of
lithium development as they see it as a vital opportunity for jobs creation,
increase incomes and infrastructural development. But there are also deep
concern of the Quinoa producers and tourism operators about the benefits of
this project to the Bolivian Government and it promised to the local needs
which can easily damage the region thriving economy of agriculture and tourism.
GOVERNMENTAL:
Despite
that the Bolivian government has being doing some important things right like
beginning a pilot effort to test the technological and economical water, there
are also fear and concern about the government ability to manage such an
ambitious project with high level of external influence. Taking in to
consideration that it require high level of trained qualified expert in the
technical and scientific fields, in business management and economics and
social and environmental impacts who are to be accounted to the Bolivian
people. Despite the reality and future challenges of lithium development, it is
hope the Bolivian Government and people be able to the task and reap the
benefits the ‘super hero of metals’.
I
end this review with ‘Bolivia the paradox of plenty’
“There
is a curious phenomenon that social scientists call the “resource curse.”
Countries with large endowments of natural resources, such as oil and gas,
often perform worse in terms of economic development and good governance than
do countries with fewer resources. Paradoxically, despite the discovery and
extraction of oil and other natural resources, such endowments all too often
impede rather than further balanced and sustainable development.”- Macartan
Humphreys, Jeffrey Sachs, and Joseph E. Stiglitz, Escaping the Resource
Curse1
“[Latin
America] continues to exist at the service of others’ needs, as a source and
reserve of oil and iron, of copper and meat, of fruit and coffee, the raw
materials and foods destined for rich countries which profit more from
consuming them than Latin America does from producing them.” – Eduardo
Galeano, Open Veins of Latin America.
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