April 2014

Lithium: The White Gold Rush

“If we have the hugest deposit of lithium in the world, why don’t we possess the largest lithium industry? It is within reach. We have to work in a coordinated and organized way, with the aim of building the largest industry,” declared President Evo Morales on February 17th, 2014. This metal could be the gold of the future. It is the main component in mobile phone and laptop batteries, and will be especially important for the electric cars of tomorrow.

By: Ian Depauw
Projects Abroad Volunteer
Brussels, Belgium

The salt lake in Uyuni conceals a possible treasure for Bolivia
Photo: Ian Depauw

Lithium in Bolivia

Bolivia possesses a huge reserve of lithium in the Salar de Uyuni; the world’s largest salt flat. Underneath it is the biggest deposit of lithium in a salt flat in the world. Could this natural resource help the country rise out of poverty? What are the stakes? Would there be repercussions for the local population near the Salar?

In May 2008, President Evo Morales officially announced the plan to build a national pilot plant to extract this precious metal. According to experts, Bolivia contains a quantity of lithium that oscillates between 9 and 100[seems to little) tons in Salar de Uyuni. It amounts to between 30% to 70% of the global stocks. The process to extract lithium from the Salar is complex. There are several required steps before the metal is ready for utilization. Water that contains lithium brine is pumped at a depth of 40 meters and poured into huge basins called evaporating swimming pools. In these pools, water is evaporated by the heat of the sun and the lithium brine is processed through multiple of these basins.

The lack of water in the Salar could be a problem in the future
Photo: Ian Depauw

Despite its large reserve, Bolivia doesn’t show up in the global lithium scene. In 2012, the main exporters were Chile (35%), Australia (35%), China (16%), and Argentina (7%). (Data on the USA is unavailable.) To sum up, Bolivia holds one of the largest deposits of lithium and the country is not among the main exporters. Why?

Bolivia’s Strategy on Lithium

On Point one of article 351 of Bolivia’s Constitution, President Evo Morales proclaims that “The State shall assume control and management of the exploration, exploitation, industrialization, transport, and sale of strategic natural resources through public, cooperative, or community entities, which may in turn contract private enterprises and form mixed enterprises.” This restriction of the privatization of natural resource production is done out of fear of reliving an exploitation that the indigenous people experienced during Spanish colonization. President Morales wants to provide the Bolivian people the opportunity to take advantage of Bolivia’s natural resources. This economic strategy should create jobs and development.

For the GNRE (Gerencia Nacional de Recursos Evaporíticos de Bolivia) and COMIBOL (Corporación Minera de Bolivia), the industrialization plan for the extraction of lithium has three phases. The first one is setting up the pilot plant. The second phase is the finalization of the industrialization plan; this is supposed to be finished by 2016. And finally, the third phase is beginning the manufacture of ion batteries in 2014 with the construction of another plant. We could say that for the moment that this plan is respected.

Morales’ government rejects the idea that foreign companies have too much control over the lithium market.

Indeed, in May 2008, a pilot plant was built eight kilometers outside of the village of Rio Grande, south of the Salar de Uyuni. This plant extracts 40 tons of lithium a month. In January 2013, a new plant producing lithium/ion-batteries was built in the industrial complex of Palca in the Yocalla Province within the Department of Potosi. This plant was inaugurated on February 17th, 2014 by President Evo Morales and will begin production in April, aiming to produce 1,000 cell phone batteries and 40 electric bike or electric car batteries per day.

According to Miguel Parra, engineer of COMIBOL, “There will be no more extraction plants constructed in the future, only more basins that will extract lithium to be treated in the pilot plant.” It’s important to notice that to extract lithium, enormous quantities of groundwater are needed. Let’s focus on some figures:

President Morales realises Bolivias potential to grow
Photo: Ian Depauw

Figures and Environmental Stakes

For the moment, there is only one line of 12 basins used by the pilot project. The first basin is the largest. It represents two hectares, and holds approximately six million litres of water.

Now, let’s look at the industrial level. According to Miguel Parra, “It is expected that six more lines of basins will be constructed. The main basin will have a capacity of 30 hectares.” With a few calculations, we know that in the future the demand for lithium will require the filtration of 10 billion litres of water per year. But right now, the industrialization plant will only process 50% of that amount.

The lithium pilot plant at the south-east edge of Salar de Uyuni
Photo: Ian Depauw

According to the French National Centre for Scientific Research (CNRS), the world’s reservoir of underground water is estimated to be 8,200 billion litres of water. In a nutshell, Bolivia will only be able to process 1.21% of the world’s underground water in 10 years, and only groundwater under the Salar de Uyuni. Moreover, at a local level, quinoa farmers, breeders of llamas and alpacas, and miners of other natural resources such as borax, sulphur, zinc, silver … of which there are many in the region, also require plenty of water. Could the lack of water in the Salar be a problem in the future?

According to Miguel Parra, there is no risk. “This region takes advantage of huge annual precipitation and the groundwater is immense. There is no reason to be worried.” However, he doesn’t know the amount of the groundwater and thus neither does he know how long the extraction of lithium will take to run through all of that water.

Lithium in the Future

According to the Chilean based company Signum Boxwhose, whose data is available on the GNRE website, lithium will be a crucial resource in the future. The organization estimates that by 2015, total lithium demand should be growing about five% per year. Bolivia could be the world’s largest exporter of lithium in the future. However, there are some issues that the Bolivian’s government could encounter soon.

The first problem is that Bolivia is entering the lithium production game late. However, Morales’ government rejects the idea that foreign companies have too much control over the lithium market. Nonetheless, Bolivia cannot presently enjoy the economic prosperity that lithium could provide.

Lithium and its utility is sleeping under the Salar, but could be replaced by other resources. For instance, researchers at Virginia Tech in the U.S. have recently developed a new battery that uses sugar instead of lithium, as reported by the January 21st, 2014 edition of Nature and Communication. These batteries could have a storage capacity 10 times greater than those made of lithium and of course, would be cheaper

Another drawback is the new discovery in 2009 of a huge deposit of lithium in Mexico which could be the largest in the world. Since Mexico has a freer economic system, foreign investors could be more interested to invest in Mexico than in Bolivia.

In April 2014, Evo Morales will visit Angela Merkel in Germany. The aim of this meeting is to discuss a possible partnership between both countries. This cooperation could accelerate the economic development in Bolivia and help the country reduce poverty. In the future, Bolivia hopes to export 40,000 tons of lithium a year, which would make the country the largest supplier in the world.

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