In the 1950s, there was an intense debate in Bolivia about the possibility for the country to take tin mining to the metallurgical stage, by installing smelting furnaces that would free the country from dependence on the foreign foundries, particularly that of the firm Williams Harvey.
Although it seemed like a debate between specialists and methods, the intricacies revealed that it was a dispute between those who thought that Bolivia’s destiny was to be a country that produces raw materials and those who bet its future on the industrialization of natural resources. Despite the fact that the nationalist regime that emerged out of the 1952 revolution was in government during this period, the powerful interests of foreign capital continued to shape its decisions. Worse still, the opposition of government technicians to the installation of a foundry was, to a great extent, encouraged by a rentier position in relation to the Williams Harvey foundry, thanks to its monetary “advances” offered to government coffers.[i]
This episode eloquently demonstrated a fundamental postulate of dependency theory about the new international division of labour produced by the late integration of Latin American countries into capitalism: it positions them in the “lower stages of industrial production... reserving to the imperialist centres the most advanced stages… and the monopoly of the corresponding technology”.[ii]
Considering these factors remains pertinent when analysing the prospects of industrialising lithium in Bolivia. It helps to reveal how old patterns of dependency persist and still act as seemingly insurmountable barriers to national development. The trajectory of the project to industrialise lithium, however, reveals a potential to radically transform the fundamental characteristics of dependency: the participation of the State and transnational companies, requires weighing the possibilities and dispositions of a policy based on the conception of the “plural economy”, that is to say, of coexistence of diverse and antagonistic economic logics.
The project initially proposed moving from a phase of research and experimentation – identifying the specific metallurgical chemical process to be applied –, through the pilot production of lithium carbonate, thence to the production of lithium carbonate on an industrial scale, and finally to the actual manufacturing lithium batteries. The first phase would be 100% controlled by the Bolivian State, while in the second phase the Bolivian government foresees the possibility of establishing partnerships with private companies, while preserving majority state participation.[iii] The participation of private partners would be accepted only “for the provision of state-of-the-art technology, necessary in the manufacture of lithium-ion batteries and other industrialization ventures”, since “the development of technological sovereignty”[iv] would be a national strategic priority.
Facing problems which were never fully disclosed by its managers, for more than a decade the project progressed slowly. The mass production of lithium carbonate, the main product of the project, and potassium chloride, was paused, and only the latter was produced. Potassium chloride has been produced on an industrial scale since 2018, while lithium carbonate is still awaiting the completion of the construction of the industrial plant.
The results achieved so far show that, although the first exports of lithium carbonate were in 2016, up until now, the technical grade carbonate has a lower degree of purity than that required for the manufacture of batteries (99.5%). The lithium pilot plant reached an average purity degree of 98.65% in 2019 and 98.51% in 2020. The research centre established by Bolivia State Lithium Company (YLB) experimented with elevating the grade of the plant’s product through a “purification” process that would have reached 99.6–99.7% purity.[v] However, these levels are the result of an experimental and costly process using imported inputs. At the same time, the state pilot project producing cathode materials and batteries project made progress, managing to produce 3,500 lithium iron phosphate battery units and 37 lithium ion batteries units in 2020. This formed the basis for an agreement for the provision of 64 V/80 packs for the Bolivian vehicle factory Quantum.[vi]
In August 2015, a 10-month contract was signed with the German firm K-UTEC for €4.49 million for the design of the industrial-scale lithium carbonate plant based on the “Bolivian” method of sulfate extraction. Protected by a “confidentiality clause”, little was known about the results of this contract, and only later did the public discover the firm had delivered its final report in May 2017.[vii] From there, the history of the project and its various dimensions were to change radically.
Since 2017, the government has carried out a series of negotiations with foreign companies from various countries, seeking “strategic partners in the production and marketing of lithium batteries”. Eight
companies submitted proposals (five from China, one from Canada, one from Russia and one from Germany), and the German ACI Systems was chosen, with the government establishing the mixed company YLB-ACI through Presidential Decree DS3738 shortly after in December 2018.[viii] The purpose of the joint venture was the “processing in Bolivian territory of lithium hydroxide, other salts, boric acid and metallic lithium from the residual brine of the Salar de Uyuni and/or other residual brines” and the international marketing of these products. [ix] DS3738 gave the joint venture a life of 70 years and assigned it just over 45 million dollars, of which 51% would correspond to YLB.[x]
These official documents did not establish an association for the production of batteries, deferring that possibility to some undefined future moment. ACISA’s official webpage stated: “subsequently, the creation of another joint venture for the production of cathode material and batteries is planned”.[xi] The annex to the Statute stated that the possibility of industrializing the hydroxide would only be defined in the future: “ACISA and YLB guarantee that studies will be carried out to determine the feasibility of industrializing the Magnesium Hydroxide...ACISA guarantees the start of the preliminary activities for the formation of the mixed company for Cathodic Materials and Batteries”. In other words, the constitution of a second mixed company for the manufacture of batteries would be subject to the “feasibility” of industrializing lithium hydroxide, for which 17% of the production would be sold, at market price, to the eventual new business.
This contract marked the radical turn of the government project, not only in the conceptualization of the productive phases, but in terms of its “sovereign” character. Based on a new modification to the constitution of the YLB by a 2017 law – which allows it to associate with national or foreign private companies for “semi-industrialization, industrialization and waste processing processes” – the constitution of the mixed company permits the inflow of capital from foreign private companies for the basic production of salts such as hydroxide, quite far from the initial prohibition.[xii]
The explanation for this change in position is that the method adopted for the extraction of lithium by evaporation was unfeasible, since the process is too slow and not efficient at extracting lithium from the brine. ACISA itself maintains this line of argument as justification for its association with YLB: “the remaining residual brine contains a high proportion of magnesium, but also most of the lithium contained in the original brine”.[xiii]
In the midst of popular mobilizations against the government in 2019 by the people of Potosi, the region where the salt flat is located, then-President Evo Morales repealed the decree. Subsequently, the recently elected President Luis Arce, during his visit to Mexico in March 2021, maintained that “the economic objective of the coup d’état [in November 2019] was the control of Bolivian lithium”.[xiv] In doing so, Arce supported the story, disseminated by Evo Morales and his allies in the media, that behind the annulment of DS3738 was a conspiracy financed by Elon Musk and transnational companies. Given the historical experience of Latin American countries, this version of events seemed plausible. However, a statement from the then Vice Minister of High Energy Technologies in a 2019 interview revealed that the government had problems with the ACI: “we are fighting with the Germans because they are withdrawing from
the contract. They no longer want to make batteries here because they say it is not profitable for them”.[xv]
Thus, the real reason for the reversal of the agreement through a unilateral measure by Evo Morales – who was unaware of the very rules of the mixed company statute – was the refusal of the foreign company to fulfil its promise to establish an industry of batteries in Bolivia after it had achieved its purpose of accessing raw materials under very advantageous conditions, a position which is totally aligned with the German strategy to achieve a “green energy transition”.[xvi] In a dramatic confirmation of the survival of dependent capitalism, the twists and turns of the Bolivian State exemplify, rather than the state’s supposed naiveté, the persistent limits to development confronted by backward countries in the midst of a global energy transition process which is dominated by the great powers.
Today we are on the cusp of a new government attempt to advance the industrialization of lithium. There is a proposal to incorporate several foreign companies – who participated for half a year in a “piloting” process – right from the initial phase of salt production, using innovative Direct Extraction of Lithium (EDL) technologies. They will work in the three largest salt flats in the country: Uyuni, Coipasa and Pastos Grandes. The new operators of the Arce government declare that this new strategy
will seek to increase production, from the 15,000 tons previously projected, up to 100,000 tons per year, as well as speed up the process and make it more efficient. That said, they have little to say about the final projected phase of industrial manufacturing of cathodes and batteries.[xvii]
All in all, this new strategy, which marks a definitive change in priorities, will have to face a legal challenge of enormous importance: the modification of Mining Law 535, which mandates 100% state participation in the production and commercialization of basic salts of lithium, potassium and other derivatives and intermediates from the salt flats.
[i] Almaraz, Sergio. El poder y la caída. El estaño en la historia de Bolivia, Editorial Los Amigos del Libro, La Paz, 1968. [ii] Marini, R.M. Dialéctica de la dependencia, en América Latina, dependencia y globalización. Fundamentos conceptuales Ruy Mauro Marini, Siglo del Hombre y CLACSO, 2008. Disponible en: http://bibliotecavirtual.clacso.org.ar/ar/libros/secret/critico/marini/04dialectica2.pdf. [iii] Montenegro, J.C. La estrategia nacional para la industrialización del litio y otros recursos evaporíticos de Bolivia, Reporte metalúrgico y de materiales, IIMETMAT, UMSA, 2010, p.51. Disponible en: https://es.scribd.com/document/243349723/REPORTE-METALURGICO-Y-DE-MATERIALES-7-umsa-pdf [iv] Montenegro, J.C. El modelo de industrialización del litio en Bolivia, Revista de Ciencias Sociales, segunda época N° 34, p.75. Disponible en: http://www.unq.edu.ar/advf/documentos/5bae6daf5bd3d.pdf. [v] GNRE, Memoria 2015. Disponible en: http://sigec.ylb.gob.bo/download1/memorias/Memoria-GNRE-2015.pdf. [vi] YLB. Memoria institucional 2020. Disponible en: http://sigec.ylb.gob.bo/download1/memorias/Memoria-YLB-2020.pdf. [vii] Zuleta, C. Empresa mixta del litio con Alemania ¿"entreguista" e ilegal?, ANF. Disponible en: https://www.noticiasfides.com/opinion/juan-carlos-zuleta/empresa-mixta-del-litio-con-alemania-34entreguista-34-e-ilegal . [viii] Gaceta Oficial Estado Plurinacional de Bolivia. Decreto Supremo 3738. Disponible en: http://www.gacetaoficialdebolivia.gob.bo/normas/buscar/3738. [ix] Obaya, M. Estudio de caso sobre la gobernanza del litio en el Estado Plurinacional de Bolivia, Cepal-GIZ, 2019. Disponible en: https://www.cepal.org/es/publicaciones/44776-estudio-caso-la-gobernanza-litio-estado-plurinacional-bolivia. [x] Bolivia: Estatuto empresa pública de tipología Empresa Mixta YLB ACISA - E.M., 10 de diciembre de 2018, disponible en: https://www.lexivox.org/norms/BO-EST-DP-N3738.html. [xi] ACISA. Litio. Materia prima para la energía y la movilidad Sostenible, en https://www.acisa.de/es/litio/#c84. [xii] Obaya, op.cit. [xiii] ACISA, op.cit. [xiv] ANF. Arce en su visita oficial a México sostiene que el objetivo del "golpe" fue el litio, marzo 24 de 2021. En: https://www.noticiasfides.com/nacional/politica/mexico-y-bolivia-restablecen-relaciones-bilaterales-y-arce-dice-que-el-objetivo-del-34golpe-34-fue-el-litio-408842. [xv] Mariette, M. En Bolivia, el sector del litio a subasta, Le Monde diplomatique, enero de 2020. En: https://mondiplo.com/en-bolivia-el-sector-del-litio-a-subasta. [xvi] Thus, while Arce and Morales alluded to the intention of the coup leaders to prevent industrialization through the agreement with the ACI, the journalists from Common Dreams pointed to the ACI itself, as interested in giving effect to the agreement through the imposition of a right-wing government , reversing the repeal made by Morales. Even one of them slips the accusation that the German was a supplier to Tesla. [xvii] Avances hacia la industrialización del litio. 17 de junio de 2022. https://www.youtube.com/watch?v=li0ctxu65Gs.