Wednesday, July 24, 2024

LATIN AMERICA | 27-10-2022 18:08

'We don't eat lithium': Latin America longs for benefits of metal boon

Global demand has exploded for lithium – the "white gold" found in huge quantities in Argentina, Bolivia and Chile. But in Latin America's "lithium triangle," there are growing concerns about the impact on regional groundwater sources and doubts about whether the benefits of a metal bonanza will truly local communities near plants, many of whom live in poverty.

The turquoise glimmer of open-air pools contrasts sharply with the dazzling white of salt flats in Latin America's "lithium triangle," where hope resides for a better life fuelled by a metal bonanza.

A key component of batteries used in electric cars, demand has exploded for lithium – the "white gold" found in Argentina, Bolivia and Chile in quantities larger than anywhere else in the world.

And as the world seeks to move away from fossil fuels, lithium production – and prices – have skyrocketed, as have the expectations of communities near lithium plants, many of whom live in poverty.

But there are growing concerns about the impact on groundwater sources in regions already prone to extended droughts, with recent evidence of tree and flamingo die-offs.

And there are scant signs to date of benefits trickling down.

"We don't eat lithium, nor batteries. We do drink water," said Verónica Chávez, 48, president of the Santuario de Tres Pozos Indigenous community near the town of Salinas Grandes in Argentina's lithium heartland.

A poster that meets visitors to Salinas Grandes reads: "No to lithium, yes to water and life."

Lithium extraction requires millions of litres of water per plant per day.

Unlike in Australia – the world's top lithium producer that extracts the metal from rock – in South America it is derived from salares, or salt flats, where saltwater containing the metal is brought from underground briny lakes to the surface to evaporate.


Soaring prices

About 56 percent of the world's 89 million tons of identified lithium resources are found in the South American triangle, according to the US Geological Survey (USGS).

The world average price rose from US$5,700 per ton in November 2020 to US$60,500 in September this year. 

Chile hosts the westernmost corner of the lithium triangle in its Atacama desert, which contributed 26 percent of global production in 2021, according to the USGS, in second place behind Australia with 55 percent. 

In the brown, rocky Salar de Atacama, trucks zigzag between pools where the brine, a mixture of water and salts, slowly evaporates before being taken to a chemical plant to separate the lithium from the liquid.

"It is by far the best salt flat in the world," Juan Carlos Guajardo, director of the Plusmining consultancy firm, told AFP. 

The country started lithium extraction in 1984 and has been a leader in the field partly because of low rainfall levels and high solar radiation that speeds up the evaporation process.

But Chilean law has made it difficult for companies to gain concessions from the government since the dictatorship of Augusto Pinochet declared the metal a "strategic resource" for its potential use in nuclear bombs.

Only two companies have permits to exploit the metal – Chile's SQM and American Albemarle, which pay up to 40 percent of their sales in tax, as well as millions of dollars to nearby communities.

Reacting to the boom, leftist President Gabriel Boric has promised to create a national lithium company, but without excluding private participation.


Dead flamingos

In the first quarter of this year, lithium's contribution to Chile’s public coffers surpassed its mainstay metal, copper, for the first time, according to government records.

Faced with the boom, leftist President Gabriel Boric has promised to create a national lithium company, but without excluding private participation.

Yet, the environmental costs are starting to stack up, and locals fear there is worse to come. This year, a study in the journal Proceedings of the Royal Society B: Biological Sciences found a link between lithium mining and a decline in two flamingo species in the Salar de Atacama.

"The development of technologies to slow climate change has been identified as a global imperative. Nonetheless, such 'green' technologies can potentially have negative impacts on biodiversity," said the study.

In 2013, an inspection at the SQM site –– which reported using nearly 400,000 litres of water per hour in 2022 –– found that a third of carob trees in the area had died.  A later study pointed to water scarcity as a possible cause.

"We want to know, for sure, what has been the real impact of the extraction of groundwater," said Claudia Pérez, 49, a resident of the nearby San Pedro river valley.

She was not against lithium, said Pérez, provided there are measures to "minimise the negative impact on people."


'Leave us alone'

Across the Andes in Argentina, the salt lakes of Jujuy host the world's second-largest lithium resources along with the neighbouring provinces of Salta and Catamarca.

With few restrictions on extraction and a low tax of only three percent, Argentina has become the world's fourth-biggest lithium producer from two mines: US-based firm Livent has had one going since the 1990s and the other, more recently, is a state partnership with Australian and Japanese firms.

With dozens of new projects in the works with the involvement of US, Chinese, French, South Korean and local companies, crisis-hit Argentina has said it hopes to exceed Chilean production by 2030. 

According to Roberto Salvarezza, president of state-owned YPF-Litio and YPF-Tec firms, production could increase fivefold by 2025.

Jujuy Governor Gerardo Morales even invited US tycoon Elon Musk, via Twitter back in April, to invest in the province when the Tesla boss complained about the high price of lithium.

But not everyone is sold on the idea.

"It is not, as they say, that they [lithium companies] are going to save the planet... Rather it is us who have to give our lives to save the planet," said Chávez, of Santuario de Tres Pozos in Jujuy Province.

In 2019, local inhabitants expelled two mining companies that wanted to establish themselves in the area. 

A few metres away, Bárbara Quipildor, 47, makes empanadas in a small shack made of salt.

"I want them to leave us alone, in peace. I don't want the lithium, even though I know there is a lot of money," she says. “My concern is the future of my children's children."





Will locals benefit?

About 300 kilometres (190 miles) north of Jujuy, the Salar of Uyuni in Bolivia holds more lithium than anywhere else –– a quarter of global resources, according to the USGS.

It is in Potosí, a region rich in silver and tin that for centuries drove the economy of the Spanish empire. But today, more than half of the residents in the region are poor.

At the beginning of his term in office, Bolivia’s former leftist president Evo Morales (2006-2019) nationalised hydrocarbons and other resources, including lithium, vowing that his country would set the metal’s global price,

Morales has called on the rest of the region to follow his example. In Mexico, lithium was nationalised last April.

In Río Grande, a small town near the Yacimientos de Litio Bolivianos (YLB) lithium plant, Morales' plans were met with excitement.

In 2014 Donny Ali, a lawyer now aged 34, opened a hotel with the expectation of an economic boom. He called it Hotel Lithium.

"Our communities are forgotten.  We were expecting major industrial technological development and more than anything, better living conditions," he told AFP, sitting on a sofa in a hotel with no guests. "It didn't happen."

Today, Bolivia still does not produce the metal on an industrial scale.

Hoping to boost the struggling lithium sector, the government opened it up to private hands in 2018, though domestic legislation has not yet denationalised the resource, and no private extraction has yet begun. 

"Some think that Bolivia will 'miss the boat' on lithium," said Juan Carlos Zuleta, a lithium specialist and economist who briefly headed YLB in 2020. "I don’t think that’s going to happen."

The real question, he said, is: when the boat comes, "will lithium extraction benefit Bolivians?"


‘The next China’

Last year, a report by the Center for Strategic and International Studies in Washington attributed "unfavourable investment climates and more challenging geographic conditions" as the reasons for why Argentina and Bolivia lag behind Chile in tapping their vast lithium resources.

Despite the differences, all three countries are now looking towards battery manufacturing – possibly even building electric cars – as a way to turn the natural lithium bounty into a modern-day industrial revolution.

Argentina is closer to batteries, with a state-run pilot plant scheduled to begin operations in December.

"South America has all the raw materials needed to produce batteries and electric vehicles," explained Zuleta.

"There is a concrete possibility for Latin America to become the next China," said the expert.

In the meantime, the Hotel Lithium remains empty and the communities of the salt flats are on the warpath for water.


by Martín Silva, AFP


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