Bolivia’s untapped ‘white gold’

An expanse of white stretching for over 10,000 square kilometers, the Uyuni salt flat at the foot of the Tunapa Volcano in the high Bolivian plateau shines like a treasure before the eyes of the tourists who come in droves to gaze at a wonder that looks straight out of a sci-fi movie. The white plain is the largest lithium reserve in the world, containing an estimated 10 million tons of the metal that the Bolivian government has yet to exploit.

In October 2010, President Evo Morales announced that Bolivia would use its own resources to begin mining its lithium. Unlike the other two large salt mines in South America – Atacama in Chile and Hombre Muerto in Argentina – Bolivia’s flat would not fall into the hands of foreign companies. The Bolivian government will oversee and finance the entire process and has obtained $885 million in loans (€698 million) from its central bank.

Bolivia is not ready to develop this industry on its own”

Henry Oporto, economist

Just after Morales took office, his government nationalized the hydrocarbon industry – a measure that created controversy and drew complaints from abroad. Bolivians, however, unanimously supported the move and no candidate has ever suggested reversing it. Economic growth, which has led to a reduction in extreme poverty and helped 20 percent of the population enter the ranks of the middle class, is mostly a result of the high price of gas and raw materials. These prices, however, could fall. During his campaign, Morales stressed his plan to turn Bolivia into the energy center of the region in the next five years.

In order to take advantage of its lithium reserves, Bolivia is intent on reaching the Asian market. Its goal is to produce materials for cellphones and as-yet-unknown products for the electric car industry – though that sector is currently at a standstill. It also plans to collaborate with Peru on installing an electrical power grid across far-flung communities. An estimated 500,000 Bolivian homes do not have electricity because they are located in faraway, isolated regions.

The question that remains is whether Bolivia has the resources to develop this industry on its own. “The government has made a lot of noise but done little beyond this grandiloquent rhetoric,” says economist Henry Oporto. “There’s no serious plan. There’s no industry for natural resources. That is the dream of the Bolivian people.”

Morales has stressed his plan to turn Bolivia into the region’s energy center in the next five years

Lithium mining has three phases. The first – the installation of pilot plants to produce potassium salts and lithium carbonate – has already provided jobs for 250 people. Now, the project is in the manufacturing phase, which is expected to provide communities in the region with 500 direct jobs and 2,000 others in related fields. According to the report Un presente sin futuro (A present without a future), published through the Centro de Estudios para el Desarrollo Laboral y Agrario (CEDLA) – the research center for labor and agriculture – this stage requires the design and construction of all the infrastructure needed to produce 30,000 tons of lithium carbonate a year and 700,000 tons of potassium chloride starting from 2016.

“This will be complicated if there is no serious plan to attract foreign investment,” Oporto explains. “The state thinks of itself as this big character but it lacks the financial capacity. It’s not ready to develop this industry on its own.”

“They have to make strategic agreements with spearheading countries and companies to allow [Bolivia] to sell resources in exchange for technology,” says economist Roberto Laserna. “Not just impose conditions.”

Both scholars say it would take Bolivia a long time to build its own technology because, despite the government’s official story, the country lacks engineers and scientists. Luis Alberto Echazú, the national director for evaporitic resources at the state-owned mining corporation, Corporación Minera de Bolivia, denies this claim and defends the government. He says the administration has already started training hundreds of professionals through scholarships for foreign universities. What’s more, he adds, the electric car battery sector will not explode until 2020 and Bolivia will have developed its industry by then.

“This is a fast-moving market and we have got on the last car of the train,” Laserna retorts.

Translation: Dyane Jean François