Between challenges and expectations, Bolivia is struggling in the lithium race

At the heart of «triangle of lithium»between Chile, Argentina and Bolivia, a global battle is taking place around this metal, essential to the energy transition. If the first two countries establish themselves as key players, Bolivia struggles to find its place.

Essential to the manufacture of batteries for electric vehicles, lithium is at the center of efforts to green the automotive sector.

Chile, Argentina and Bolivia occupy a major position in this crucial market. Together, they hold 60% of the world’s lithium resources, according to the American Institute of Geophysics (USGC).

However, Bolivia has so far only launched four pilot projects and one factory operating at low speed.

In 2023, the country produced 948 tonnes of lithium, according to its Ministry of Mines, or a tenth of Argentina’s production and 46 times less than that of Chile, the second largest producer in the world after Australia, according to US government data.

The image of “lithium triangle is confusing, because it gives the impression that it is a homogeneous region (…) However, it differs greatly depending on the country and region”underlines Martin Obaya, researcher at the National University of San Martin, in Argentina.

In South America, this metal is found in salt pans. The most economical method of extracting it involves pumping underground salt water into open ponds, where it evaporates, leaving lithium compounds to appear over time.

But if in the Chilean Atacama salar, it is possible to drill several tens of meters deep, that of Uyuni, in Bolivia, is limited to 11 meters. Beyond that, the soil is too compact, explains Gonzalo Mondaca, researcher at the Bolivian Documentation and Information Center (Cedib).

In addition, the climatic conditions, with the presence of rain, do not favor optimal evaporation in this salar located at 3,600 meters above sea level. The factory inaugurated at the end of 2023 only supplies 20% of the 15,000 tonnes it was supposed to produce.

“Window of Opportunity”

“There will always be a debate about whether we are facing a window of opportunity that is about to close. But the project results are frustrating compared to expectations”note M. Obaya.

Recently, Bolivia revived hopes by signing two contracts to build factories using the innovative direct lithium extraction (DLE) process, which uses chemical or electrochemical technologies. The process, more efficient and less water intensive, is however more expensive.

According to the public company Yacimientos de Litio Bolivianos (YLB), the cost of producing a ton of lithium in the Uyuni Salar varies between $4,000 and $8,000, compared to $2,500 to $4,000 in Chile.

An agreement was signed with the Russian company Uranium One to build a factory with a capacity of 14,000 tonnes per year, another with a subsidiary of CATL, the world’s largest battery producer, for two factories totaling 35,000 tonnes.

Both agreements, however, still need to be approved by MPs, in a process that could get bogged down due to deep divisions within the ruling party majority.

In addition, there are currently no regulations governing this emerging industry, points out Mr. Mondaca. Proposals have been on the table for two years, but have not yet been debated.

“The country is not ready (…) in terms of technical, regulatory and institutional capacities”assures the Bolivian expert.

For Gustavo Lagos, professor at the Catholic University of Chile, in two or three decades, “Bolivia could eventually produce a lot of lithium. But we’re not there yet.”.

The country of 11 million inhabitants claims to have the largest ” resources “ of lithium in the world with 23 million tonnes. But, the volume of its “reserves”i.e. what can actually be extracted, has not yet been officially announced.

“If the Bolivian government has succeeded in one area, it is that of propaganda. It has fueled expectations for more than 15 years”deplores Mr. Mondaca, whose organization had access to the documents annexed to the contract signed with Uranium One, where the State confirms the feasibility of the extraction of only… 10% of the resources of the Uyuni salar.