Latin Analysis: the Uncertain Future of Bolivia’s “White Gold”
Carlos Becerra/Bloomberg
Bolivia – one of the three members of the so-called “lithium triangle” along with Argentina and Chile – is the country with the largest reserve of lithium in the world, known as the world’s white gold. For many years now, experts have remarked that the country could use such a valuable and desired resource, which is highly demanded by companies in the technology and energy sectors, to attract foreign direct investment from all over the world to boost the country’s economy, and consequently, significantly improve its prospects for development, as these have been stagnant within the last years. Nevertheless, several Bolivian leaders have promised to industrialize the extraction of lithium to make the process more effective and more profitable. Still, it remains as one of the country’s main objectives, even during these times of political and economic uncertainty which the nation has been facing.
Evo Morales’s Lithium Plan
One of the most salient promises Morales had made during his campaign as a presidential candidate was to become the president who would finally manage to consolidate the industrialization of the lithium so that the profits would benefit the Bolivarian people first and foremost. Indeed, during his presidency, he centered his efforts on nationalizing lithium and evaluating foreign lithium-extraction companies from all over the world. Consequently, he established an agreement with the government of Germany to make the extraction of the white gold significantly more efficient.
Even when the European country and Bolivia had publicly commented on the deal amidst countries within the public sphere, Evo Morales kept having talks with Vladimir Putin regarding a possible complementary deal with the Russian government, in which both governments would cooperate to extract lithium from the South American nation and establish Russian center for nuclear energy exploration and research. Additionally, Morales also received several officials from the Chinese government who were also interested in investing in the country and its lithium reserves. However, no official agreement between Bolivia and China or Russia was ever announced.
Even when it appeared that the lithium extraction deals were solidifying at last, during the last weeks of Morales’s presidency, he decided to cancel the agreement the Bolivian administration had with the German companies. As he was exiled from the country during the 2019 Bolivian coup, he argued that he had been pressured to take sudden decisions, and was ultimately forced to resign and flee to Mexico, because the US was concerned regarding a possible Bolivian – Chinese relationship and that the American government had interfered in the political crisis because it was interested in the Bolivian lithium.
All in all, even when the government of Germany has been insistent that it is still interested in cooperating with Bolivia, the lithium territory is yet only controlled by the state-owned National Strategic Bolivian Lithium Deposits (YLB) company.
Lithium and a “Transitional” Government
After the 2019 Bolivian crisis, the country has been governed by a “transitional” administration until a new president is voted. Elections were to be held during May 2020. Notwithstanding, due to the COVID-19 crisis, these have been postponed until October, and so, until then, the Lithium extraction is not likely to become more effective or profitable.
Several researchers have pointed out that Lithium could be the “secret weapon” for Bolivians to support their harmed economy in order to lessen the possible impacts the coronavirus recession is likely to have in the Latin America region. Given this, presidential candidates are strongly basing their speeches on promises to make the lithium extraction more efficient and profitable, so that the Bolivian people will be benefited from this. As this promise has been made by many political parties and politicians in the past, Bolivian citizens have grown increasingly vocal on demanding more accountability on governmental decisions surrounding the lithium deposits, as well as civil societies demand more influence within the YLB decision-making processes, especially regarding the appointing of authorities to lead the company, the choosing of national and international members and associates, and the selection of the extraction-methods to be performed by the workers of the institution.
Moreover, as lithium is an essential element for growing sectors like technology and automobile-production, its international demand (despite the unavoidable COVID-19 economic crisis) will continue to increase. Because of that, it is not only Germany that keeps manifesting a public interest to collaborate with the to-be-elected government of Bolivia, but nations such as China and the US, as well as private companies around the world, are also persistent on wanting to participate in the extraction of lithium. However, today more than ever, as the white gold seems to be the Bolivarian ticket to improve the life-quality of the citizens and avoid an upcoming profound economic recession, Bolivians will be ever more attentive and vigilant on the decisions being taken surrounding the lithium reserves on Bolivia’s territory.
Yet, as elections have already been delayed several times, it is uncertain when this new government will take over so that decisions can be taken. Until then, the social and economic future of the country will remain ambiguous. What is expected, is this competition amongst countries and transnational companies to keep intensifying over the following moths. Without a doubt, this has become an interesting race amongst institutions to offering Bolivia the better deal to guarantee a place in the much-promising lithium business.
