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Bolivia’s Lithium Could Remain Untapped Without Agreements With Local Communities

The Potosí region, which boasts the country’s largest lithium reserves, is demanding higher royalties, while experts see the harnessing of the mineral as impossible if agreements are not reached with local inhabitants

Bolivia is hoping to become a major lithium producer and exporter. Pictured, a lithium mine in Calama, in Chile's Antofagasta region.
August 05, 2022 | 04:15 pm

La Paz — Bolivia is in the process of discussing the way in which it will exploit the country’s lithium resources as the mineral, dubbed ‘white gold’, is seen as a route out of poverty, but the process has been held up for more than 15 years.

The Civic Committee of the Potosí region (Comcipo) this week organized a symposium on lithium as a forum for discussion and as a means of contributing to the drawing up of a bill to govern the exploitation of the resources, and which contains a royalties proposal for the region, and which will be submitted to the government.

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The bill is designed to contain a national policy for the extraction, processing and integral and sustainable industrialization of lithium and other evaporite resources in Bolivia.

Among the issues raised during the symposium are concerns about the environment, water and indigenous communities that could be affected by lithium exploitation.

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Bloomberg Línea consulted Álvaro Ríos, managing partner of Gas Energy Latin America, on what Bolivia will have to do to make lithium exploitation a reality, and which was first proposed back in 2006 during the first term of then president Evo Morales.

The main problem facing Bolivia, beyond the company chosen to develop the resources, is the lack of social agreement with the communities living in the salt flats where the lithium lies, according to Ríos, who directs studies and consultancy in energy in Latin America with a focus on the natural gas, electric power and petrochemical chain. Between 2006 and 2007 he was executive secretary of the Latin American Energy Organization (OLADE), and served as Bolivia’s minister for hydrocarbons between 2003 and 2004..

“The process that the Ministry of Energy is following is a bidding process of technologies that seems to me prudent, it is reasonable to see which company is the one that offers the best technology in terms of efficiency in the amount of recovery so as not to damage the salt flats, and so on. But it must be recognized that the selection process could have been more transparent,” Ríos told Bloomberg Línea.

Six companies have emerged as suitors in a pilot tender for lithium extraction in Bolivia, 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, said in June.

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Social pact

However, Ríos considers that in order to establish a lithium development model, “first, a social pact must be established, mainly with all the people of Potosí, with all the citizens. It must be clearly established what the royalties are, what taxes are going to be paid ,and what benefits are going to stay in Potosí. As long as this is not clear, it is evident that the social license for the companies that come to operate will not be granted”.

The largest Bolivian lithium deposits are found in the Uyuni salt flat, located in the department of Potosí. Uyuni is located at an altitude of 3,670 meters (12,040 feet) above sea level, and is one of the largest in the world with an area of 10,000km² (180km long and 80km wide).

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Potosí is the poorest department in the country however, with a very low human development index, and local community members are demanding higher royalties for the possible exploitation of lithium, a vital component for cell phone, computer and electric car batteries. It is also used in the glass and ceramics industries.

Only 57.9% of Potosí inhabitants have a bathroom or toilet in their homes, only 55.1 % have access to improved sanitation, while 17.5% have no education or schooling, and only 34.9% have completed primary school.

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The communities depend on the land and live from agriculture, growing quinoa and potatoes, and raising livestock, as well as salt mining, combined with minimal and precarious boron and potassium extraction.

On the other hand, Uyuni’s urban population lives mainly from commerce, handicrafts and tourism. A major concern is that lithium extraction models damage the environment on the locals depend to attract visitors, and which has generated an intense social conflict and disagreements among the population.

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‘The whole world is doing it’

“All the companies in the world know that the social license is very important because when the communities do not agree, the development of the activity becomes very complicated,” Ríos says.

“The people of Potosí must open their minds to the fact that lithium is a new raw material that can give a new life to Potosí. The people of Potosí should not oppose its exploitation, but I believe that the government has to agree on a model with clear rules. This is what is missing, and perhaps this is what the international companies are referring to when they say that it is difficult to achieve early exploitation in Bolivia.”

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For Ríos it is urgent that Potosí and Bolivia develop lithium, since the whole world is doing it, and “it is the gold of the future”.

He also points out that lithium extraction is not as lengthy a process as hydrocarbon extraction, given that lithium lies nearer the surface. “You don’t need five or 10 year to develop and bring it to market as if it were gas. With lithium all we have to do as Bolivians is reach an agreement,” he says.