Let's talk Latin America

Bolivia’s new age of mining?

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Joe Sharp discusses the risks, as well as the benefits the lithium reserves found under the Salar de Uyuni in Southern Bolivia could bring for the population of one of South America’s poorest nations.

In the mid-1500’s, Spanish conquistadors discovered huge silver reserves in the Cerro Rico mountain just outside the city of Potosi in Bolivia. This discovery brought untold amounts of wealth to the Spanish and was the source of around half of the world’s silver. Whilst the Cerro Rico continues to be mined today, its minerals were largely depleted by the mining activities of the Spanish in the 16th and 17th centuries. As a result, the native inhabitants of Bolivia have never benefited economically to the same extent as the Spanish did. Almost 500 years later a new mineral has been discovered under the world’s largest salt lake, situated in the South West of Bolivia. Below the salt crystals that form this expansive white landscape lies about 43% of the world’s known reserves of lithium – a key mineral used in medicine, and more importantly within the context of our age of technology, used in everything from smart phones to laptops to electric cars. With demand for lithium expected to boom in the near future, Bolivia, one of South America’s poorest countries, is predicted to become significantly wealthier.

This poses the question: will Bolivia be able to break with the past and effectively exploit the lithium reserves of the Salar de Uyuni for its own economic benefit? Bolivia’s minister for mining, Luis Alberto Echazu has said: “We will not repeat the historical experience of the 15th century: raw materials exported for the industrialisation of the west that has left us poor.” Bolivia’s Left-wing president, Evo Morales, has stated that he does not want the Salar de Uyuni to be exploited by foreign corporations. Instead he wants to broaden state control over the countries mineral reserves, in an attempt to allow Bolivians to prosper from the activities. Billions of dollars worth of foreign investment has been offered to the Bolivian government by international car manufacturers and mining firms, in order to develop the mining of lithium, however this has mostly been rejected. In January of this year, Bolivia began its first attempts to mine the natural resource opening a lithium-production plant on the edge of the salt flats at the cost of $19 million.

However, as Bolivia makes its first steps to extracting the lithium, a number of potential pitfalls must be considered, the first being seasonal flooding in the Salar de Uyuni, which may potentially limit productivity. In addition to this, there is a significant lack of the infrastructure needed to export the lithium from Uyuni, and the lithium under the Salar De Uyuni is highly diluted across the plains, so extensive extraction operations would be needed across a large region. These factors combine to make the salt flats a difficult and expensive place to mine lithium. It must also be considered that the process will cause irreparable damage to the landscape.

Lessons can be learnt from Potosi, where 500 years of continuous mining with little government intervention is having potentially devastating effects on the mountain, which forms part of a UNESCO world heritage site. Recently, mining has caused parts of the mountain to collapse, posing a real threat to the environment. What’s more, the inhabitants of Potosi have become over-dependent on the mines of the Cerro Rico for employment, with little other job prospects in the area. The Government must be careful that a similar scenario does not develop in Uyuni.

Header photo: Piles of salt in Salar de Uyuni, credit Luca Galuzzi, Creatie Commons 2.5.