6 Suitors Emerge for Bolivia’s Lithium in Tender Tinged With Controversy

Bolivia has the largest lithium resources in the region, but accusations of favoritism for a Russian company involving the president’s son in the country’s tender process have emerged

Salar de Uyuni, Bolivia
June 20, 2022 | 01:55 PM

La Paz — Six companies have emerged as suitors in a pilot tender for lithium extraction in Bolivia, according to Carlos Ramos, executive president of Yacimientos de Litio Bolivianos (YLB), the state-owned company set up to oversee the development of the resource in the South American country.

According to studies carried out and financed by YLB, lithium recovery rates in Bolivian territory would be higher than 80%, and in some cases 90%.

“The results of the call are intended to study the applicability of different technologies for direct lithium extraction in the the Uyuni, Pastos Grandes and Coipasa salt flats, as well as to accelerate the industrialization of evaporite resources efficiently, and with the least environmental impact,” Ramos said.

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However, the process of lithium’s commercial exploitation in Bolivia has been hampered by several factors, such as technological limitations, citizen resistance from communities within the areas targeted that are opposed to its exploitation, the lack of a legal framework for the exploitation of the resource, and political conflicts amid divided opinions on how much tax should be levied and the royalties to be paid for the exploitation of the resource.

In addition, a controversy has also emerged involving President Luis Arce. Last week, a photograph was made public showing the smiling son of the president, Marcelo Arce, together with representatives of Russian company Uranium One Group. The photograph was circulated in the media, and indicates that there could be an intention to award the lithium contract directly without respecting the bidding process.

In a public statement, Ramos said the bidding process has included the presence of representatives of the participating companies, the head of transparency for YLB and a public notary, with the purpose of guaranteeing the transparency of the process.

Uranium One Group is part of Russian state corporation Rosatom, which has already closed agreements with the Arce administration for the construction of a nuclear power plant in the city of El Alto, in a contract valued at $300 million.

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Bolivia has around 21 million metric tons of certified lithium resources. According to the United States Geological Survey (USGS), Bolivia has the largest lithium resources in the region, well above those of Argentina, which in 2019 was considered the region’s number one, with 19 million tons. Chile, on the other hand, has nine million tons of lithium resources, with the three countries comprising the so-called ‘lithium triangle’.

Bolivia already produces and exports potassium chloride and lithium carbonate extracted from the Salar de Uyuni, the largest salt flat in the world, with an area of 11,000 square kilometers.

But the Bolivian ‘lithium dream’ has not yet materialized, having been on the drawing board since former president Evo Morales took office in 2006, and who promised that the industrialization of the resource would lift the country out of poverty. However, communities neighboring the ‘white desert’ where the resource is located continue to experience extreme poverty, and from where many are forced to migrate to Chile in search of temporary jobs.

This phenomenon is known as ‘swallow migration’ because it occurs once a year.

The current government of Luis Arce maintains Morales’ policy. Álvaro Arnez, vice minister of energy technologies, said recently that “in the average scenario of international lithium carbonate commercialization prices, the commercialization of 40,000 metric tons of lithium carbonate would represent around $2 billion per year in revenues for Bolivia”.

For his part, Ramos said that, “as a state, as a country, we must protect this natural resource and make sure that the greatest amount of benefit goes to Bolivians. We are going to propose the conditions under which the companies could work with YLB in order to continue the industrialization process and advance in the implementation and installation of lithium industries in the various salt flats”.

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The six companies that are vying for a contract in this stage of the study are Lilac Solutions, Catl Brunp & Cmoc, Citic Guoan/Crig, Fusion Enertech, TBEA Group and Uranium One Group.

Translated from the Spanish by Adam Critchley