In the future, lithium is king. As electric vehicles (EVs) force traditional gasoline cars out of America and the world’s garages, the price and profitability of lithium is expected to skyrocket in the coming years. It’s not hard to see why this is. Driven by demand from climate-conscious (or simply budget conscious) consumers and by regulatory pressures from governments, firms new and old alike such as General Motors (GM) and Tesla are rising to the challenge of replacing most of America’s 289.5 million gasoline cars. State governments such as Massachusetts and California are already making pledges to end the sale of fossil-fueled powered vehicles by 2035. In fact, if the lithium supply is to keep up with the burgeoning demand for it, comprehensive political changes in some unexpected areas will have to occur.
To truly understand how important lithium could be for the world’s energy storage future, one has to look under the earth first. Currently, the leading lithium exporter in the world is Australia, providing the majority of the world’s supply of this vital resource. With a small fraction of the world’s total lithium resources, they cannot possibly keep up with the soaring demand. In fact, the world itself cannot keep up with the demand. At the current rate, we should be running out of the metal in around 17 years. Until then, this salt is going to be making a lot of money for lithium producing countries.
If Australia isn’t able to keep up with the worldwide demand for lithium, who can? In terms of raw deposits, China and the USA have large amounts of the mineral underground, housing 7 million and 6.9 million tonnes respectively. Given the two countries’ position as world leaders in EV innovation and production, not making use of these untapped resources doesn’t really make sense. However, the vast majority of this lithium is deposited in the form of hard rock, which is extremely expensive to process and dangerous to extract. As such, the true future leader of lithium production is actually in South America, in a region that's been hailed as ‘The Lithium Triangle’.
Two countries in this region, Bolivia and Argentina, hold nearly 40% of the total amount of lithium that is expected to exist on Earth. Both of these nations have the same, if not better, geological advantages than Chile, the largest exporter of lithium within the triangle. Bolivia actually hosts some of the world’s largest salt flats, practically begging to be exploited with its flat landscape and close-to-surface brine. Yet, they are both far from being the world’s top producer of lithium. For Argentina, it isn’t that hard to see why, with frequent political difficulties wreaking havoc on the country and an Ease of Doing Business Index score that puts it just above Iran and under Senegal. But this may change soon, as the country slowly stabilizes and eyes its vast supply of resources.
In Bolivia though, a more interesting picture emerges upon inspection. As the most lithium-rich country in the world, this nation is undoubtedly the best geologically poised country to take on the challenge of electrifying the world’s vehicles. The country’s public and private sectors know it too, prioritizing investment and development in the Salar de Uyuni, the salt flats region. But progress is slow, and being the poorest country in South America other than Venezuelamakes capital somewhat hard to come by. This isn’t the extent of Bolivia’s troubles in terms of extracting this resource, though.
Bolivia is also notable for being one of the socialist leaders of the world, spearheading the movement known as the ‘Pink Tide’ that swept across South America, turning much of the continent sharply to the left of the political spectrum. Since that time, and until very recently, President Evo Morales has held power, maintaining a public policy wholly unfriendly to foreign investment and widespread resource extraction. These policies by themselves, though, are not negative by any means. In Bolivia, the Pink Tide was driven forwards largely by the indigenous movement, and Morales himself is actually part of the native Aymara people, who lived in the region for millennia before the Spanish arrived. These policies were ostensibly instituted to protect the sacred lands, waters, and mountains of those peoples. Part of these protections include banning foreigners from managing and operating enterprises that make use of the country’s silver, oil, and, of course, lithium.
For those companies though, the scarcity of foreign capital and expertise proved disastrous for their business interests. To solve this problem, they formed a conservative coalition broadly backed by big business, and launched a coup in 2019, ousting Evo Morales and his socialist government for around a year. To this day, the exact circumstances behind the coup are debated, but a couple pieces of evidence have emerged. Among them were audio recordings between key leaders of the incoming government and notable Republican US Senators such as Ted Cruz and Marco Rubio. The US was also involved in a broadly criticized Organization of American States (OAS) report seeking to delegitimize the Bolivian elections in 2019. Though the US’ involvement is still circumstantial at this point, this sort of action would hardly be surprising for the country responsible for the centuries-old Monroe Doctrine. Either way, lithium exploitation was definitely a priority for the new government of Bolivia, as they set to work reviving foreign investment in the crucial resource.
As of March of 2021 though, the Bolivian people have returned the original socialist government to power, albeit without Morales at the helm this time. This time, it looks like indigenous politics may play a larger role than ever before. It is likely that any further action taken by Bolivia in terms of mining and resource extraction will take on an even further aboriginal angle, signalling a return to the status quo before the coup. However, if Bolivia is to truly realize its lithium dreams despite skepticism abroad, it needs to recognize that some of what the conservative government did can remain. Chief among those actions is a vital German contract, which may provide much-needed expertise and capital to the still relatively untapped lithium industry. Though the government is correct to focus on the rights of indigenous peoples and their sacred lands and waters, this highly prized mineral will remain under the ground if nobody is willing to get it.
Photo: Image via Flickr (Andrew O'Brien)