By Julieta Pelcastre

Increased lithium extraction in Bolivia is capturing international attention, as the government seeks to attract foreign investment to build processing plants. Yet experts point to the lack of transparency in the agreements with Chinese and Russian companies and their real impact on the country, an April 3 report by environmental news platform Mongabay indicated.

“After the consolidation of agreements between Chinese and Russian companies with the Bolivian government, we did not see that they went to work immediately,” Gonzalo Mondaca, associate researcher at the Bolivia Documentation and Information Center, told Diálogo on April 28. “Rather, it was to get a foot in the door to secure Bolivian lithium, to scare off and obtain an advantageous position over other international actors.”

In February, Bolivia launched an international call to attract firms willing to participate in the industrialization and extraction of lithium. After the closing of the tender on March 6, a total of 26 companies were selected to advance to the next stage of the initiative, Mongabay reported.

La Paz seeks to carry out pilot projects in seven salt flats: Uyuni, Coipasa, Pastos Grandes, Capina, Cañapa, Chiguana, and Empexa. Bolivia has one of the largest lithium reserves on the planet, with a total of 23 million metric tons concentrated in the Uyuni and Coipasa salt flats.

While the new call for tenders is not accessible, Mondaca said that there is a high probability that both Chinese and Russian companies will get even more contracts. “Let us remember that China wants to control the world’s lithium production, although its officials say otherwise,” Argentine news site Infobae reported.

Lack of clarity

Lithium is a strategic mineral for the transition to cleaner and renewable energies. Today, lithium carbonate is the main material used in the batteries of electric cars, cell phones, and other consumer electronic devices in the world, Voice of America reported.

In December 2023, Bolivia and Uranium One Group, part of the Russian State Energy Corporation, signed a multi-million-dollar agreement to process lithium carbonate. The plant will produce a total of 14,000 tons per year. This project contemplates an investment of $450 million until 2025, German news media DW reported.

In June 2023, the Bolivian government made deals with Citic Guoan of China and Uranium One Group of Russia. These agreements came after the contract signed in January of that same year with Chinese consortium CATL BRUNP & CMOC. These companies, together with state-owned Yacimientos de Litio Bolivianos (YLM) are currently working in the Bolivian salt flats, Bolivian site El Periódico de la Energía reported.

Beijing and Moscow “promised La Paz rapid lithium extraction. However, there is a lack of clarity about the methods they will use to handle residual brines, which in the absence of lithium, become an environmental liability,” Mondaca said. “Storing them in pools is costly; the most viable option is reinjection.”

According to El Periódico de la Energía, the Chinese consortium CMOC installed a pilot plant, but there is no information on its capacity or methods used, and it did not submit reports on its results. There is also no information on the activities of the company Citic Guoan.

Mondaca pointed out that Uranium One is one of the most active firms. “It establishes alliances with universities for research, but information on these agreements is not available. In addition, it entered into an agreement with YLM to install a pilot plant in the Salar de Uyuni, where the state’s direct extraction facilities are located.”

According to Mongabay, the projects lack adequate socialization, as well as necessary water studies. Nor did they take into consideration prior consultation with the communities near the salt flats. In Bolivia, following the 2014 Mining Law, the opinion of communities is not mandatory in mining activities.

Turnkey

Juan Carlos Montenegro, director of the Institute of Metallurgical Research at the Higher University of San Andrés in Bolivia, told Mongabay that the lack of information surrounding lithium extraction can be attributed to conditions imposed by Chinese and Russian companies.

“Unfortunately, the details and scope of these agreements are not public knowledge,” Montenegro said. “Surely the companies imposed some confidentiality clauses.”

Mondaca pointed out that the companies would build the processing plants, as well as maintain the facilities and train the personnel. However, the production would be managed by YLB.

“Primary production of evaporite products is 100 percent state-owned. Under the turnkey figure, the usual thing would be to cancel contracts and request the immediate delivery of the works,” Montenegro added. “However, Bolivia lacks the resources to do so. It is likely that the agreement contemplates payments in installments, and even in product, which would be illegal.”

Dialogo Americas

The views in the article are the author’s own and do not necessarily reflect the editorial policy of InfoBRICS.