Nearly two-thirds of the world's identified lithium reserves are located in Bolivia, Chile and Argentina.

The explosion of electric cars through the use of lithium-ion batteries has placed the large reserves of this metal in the Bolivian Altiplano and the Atacama Desert at the center of the world's interest in this new industry. Will South America seize the opportunity to enter into technological innovation processes itself, or will it once again resign itself, as has happened with so many other minerals, to mere extraction?

▲Salar de Uyuni, in the highlands of Bolivia [Luca Galuzzi, Wikimedia Commons].

article / Milene Pardo-Figueroa

With the gradual incorporation of electric vehicles into the market, as well as increased sales of smartphones, laptops, tablets and other electronic devices - all of which are powered by lithium-ion batteries - global demand for lithium is rising. This alkaline chemical element, which in its pure form appears as a soft, especially light metal, is abundant in nature, although the largest reserves are concentrated in just a few countries. Due to the conditions of its extraction, it is particularly profitable in the dry areas of the triangle delimited by the borders of Bolivia, Chile and Argentina. If lithium is known as "white oil" or "new gasoline" because of the color of the saltpetre in the deposits where it is found and because it is the driving force behind modern automobiles, the border area of these countries is known as the "Saudi Arabia of lithium".

The "fever" for lithium has led to a current production of 40,000 tons per year, a figure that falls short of the enormous existing demand, which currently poses a need for 180,000 tons. Although this Issue may be reached in the next few years, estimates point to a demand of between 500,000 and 800,000 tons in 2025. By then, agreement to some forecasts, the global lithium battery market could be worth $46 billion. Part of the boost to the sector comes from the innovation of electric cars. The expansion of that market, however, could be slowed if lithium production does not accelerate. As visionary entrepreneur Elon Musk, promoter of the high-end electric car brand Tesla, has warned, "to create 500,000 vehicles a year, we basically have to retain all the lithium generation on the planet."

The difficulty in meeting this growing demand comes from the high costs of extraction, which vary considerably depending on the characteristics of the deposit. The most profitable deposits are found in brine concentrates in arid climates, which undergo rapid evaporation when brought to light. This is especially true in the area formed by the Atacama Desert and the Bolivian Altiplano.

World production is led by Australia, which in 2016 extracted 14,300 tons, followed by Chile, with 12,000, and Argentina, with 5,700, agreement to figures from the US Geological Survey. The Issue of identified reserves places the South American countries clearly ahead, especially Bolivia, which has the largest deposits, although for now there has been little development of mining activity of this metal. Thus, Bolivia has identified reserves of 9 million tons (22.7% of the world total), Chile 7.5 million (18.9%) and Argentina 6.5 million (16.4%), which means that the three countries account for 58% of the world's reserves. They are followed by the United States, with 5.6 million (13.9%), and China, with 5.4 million (13.6%). Other estimates give China reserves similar to those of Argentina. The sector is dominated by five large companies, which control 90% of world production: SQM (Chile), FMC and Albermarle (USA), Talison (Australia) and Tianqi Lithium (China).

The white triangle

The Salar de Uyuni in the Bolivian altiplano - a salt-covered surface generated by the evaporation of seawater that was locked up in a lake when the Andes Mountains emerged in its trainingis home to what could be the world's largest lithium deposit. Obtaining it faces the problem that here the metal is especially mixed with magnesium and the separation of both requires access to technology that Bolivia does not have at the moment on a large scale. Fearing that foreign companies will control the extraction and leave little benefit to the country, as has historically happened with mining development , the government of Evo Morales has opted for a limited exploitation for the time being. Bolivian authorities have preferred to prevent the penetration of multinationals, in order to ensure that the South American nation maintains control of the business. Morales has announced plans for the start-up, with public financing, of a lithium carbonate manufacturing facility at the Uyuni salt plant.

Lithium mining is much more advanced in Chile, which accounts for around 33% of the world's supply, thanks to the large deposits in the Atacama Desert and the development of its own industry. Sociedad Chemistry y Minera de Chile (SQM), a private Chilean company, leads the domestic sector, where concessions are closely controlled by the state. For its part, Argentina is taking steps to boost the lithium business; to this end, the government of Mauricio Macri is proceeding with the liberalization of the sector and has established contacts to attract foreign capital.

Beyond the economic benefits that these South American countries can obtain from the boom in lithium exploitation, a discussion has been generated in their societies about the ecological impact that this may cause in places as unique for their natural characteristics as Atacama or Uyuni; there are voices that warn that the Andean salt solution may be condemned to disappear to satisfy foreign interest in batteries. There are also fears of a social impact, without compensation for the human groups settled in the affected territories.

On the other hand, the negative impact that the perpetuation of an economic culture of extraction has historically had in Latin America advises Bolivia, Chile and Argentina to take the opportunity to try to develop their own transformation initiatives and new technologies in the generation of batteries, without limiting themselves, as is the case with so many other minerals, to an extractive activity.