Latin America’s ‘lithium triangle’ hopes for benefits for metals demand

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AFP-Jiji
A worker displays 99.9 percent lithium inside Sociedad Quimica Minera’s El Carmen Lithium processing plant in Antofagasta, Chile, September 13.

SAN PEDRO DE ATACAMA, Chile (AFP-Jiji) – The turquoise glow of the open-air swimming pools contrasts sharply with the dazzling white of the salt flats of Latin America’s “lithium triangle”, where hope for a better fueled life lies by a metallic windfall.

A key component of batteries used in electric cars, demand has skyrocketed for lithium, the “white gold” found in Chile, Argentina and Bolivia in greater quantities 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 areas already prone to prolonged droughts, with recent evidence of mass tree and flamingo die-offs.

And there are few signs so far of positive fallout.

“We don’t eat lithium or batteries. We drink water,” said Veronica Chavez, 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 liters of water per plant per day.

Unlike Australia – the world’s largest producer of lithium which extracts the metal from rock – in South America it is derived from salars, or salt pans, where salt water containing the metal is brought from underground brackish lakes to the surface to evaporate.

The price spike

About 56% of the world’s 89 million tonnes of lithium resources are found in the South American Triangle, according to the US Geological Survey (USGS).

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

Chile is home to the westernmost corner of the lithium triangle in its Atacama Desert, which contributed 26% of global production in 2021, according to the USGS.

The country began lithium mining in 1984 and has been a leader in this field partly due to low levels of precipitation and high solar radiation which speeds up the evaporation process.

But Chilean law has made it difficult for companies to win concessions from the government since Augusto Pinochet’s dictatorship declared the metal a “strategic resource” for potential use in nuclear bombs.

Only two companies have permits to exploit the metal: the Chilean SQM and the American Albemarle, which pay up to 40% of their sales in taxes.

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

Yet the environmental costs are starting to pile up and residents fear the worst is yet to come.

This year, a study published in the journal Proceedings of the Royal Society B linked lithium mining to the decline of two species of flamingos in the Salar de Atacama.

“Developing technologies to slow climate change has been identified as a global imperative. Nevertheless, these “green” technologies can potentially have negative impacts on biodiversity,” the study states.

In 2013, an inspection at the site of SQM – which said it used almost 400,000 liters of water per hour in 2022 – found that a third of the carob trees in the region had died.

A later study indicated that water shortage was a possible cause.

“We want to know, with certainty, what the real impact of groundwater extraction has been,” said Claudia Perez, 49, a resident of the nearby San Pedro River Valley.

She wasn’t against lithium, Perez said, as long as there were measures to “minimize the negative impact on people.”

‘Leave us alone’

On the other side of the Andes in Argentina, the salt lakes of Jujuy are home to the second largest lithium resources in the world along with the neighboring provinces of Salta and Catamarca.

With few restrictions on extraction and a low tax of just 3%, Argentina has become the world’s fourth largest producer of lithium from two mines.

With dozens of new projects underway with participation from American, Chinese, French, South Korean and local companies, Argentina said it hopes to overtake Chilean production by 2030.

But not everyone is convinced by the idea.

“It is not, as they say, that they [lithium companies] let’s save the planet… Rather, it’s us who have to give our lives to save the planet,” said Chavez, from the Santuario de Tres Pozos in the province of Jujuy.

A neighbour, 47-year-old street food vendor Barbara Quipildor, added fiercely: “I want them to leave us alone, in peace. I don’t want lithium… My concern is the future of my children’s children.

Will residents benefit?

About 300 kilometers north of Jujuy, Bolivia’s Salar de Uyuni contains more lithium than anywhere else – a quarter of the world’s resources, according to the USGS.

Half of the people in the region – which is also rich in silver and tin – live in poverty, according to household surveys.

The country’s leftist former president, Evo Morales, nationalized hydrocarbons and other resources such as lithium around the start of his 2006-2019 term and promised that Bolivia would set the world price for the metal.

In Rio Grande, a small town near the Yacimientos de Litio Bolivianos (YLB) lithium plant, Morales’ plans were met with enthusiasm.

In 2014, Donny Ali, a now 34-year-old lawyer, opened a hotel hoping for an economic boom.

He called it Lithium.

“We expected major industrial technological development and above all better living conditions,” he told AFP. “This does not happen.”

Hoping to boost the struggling lithium sector, the government opened it up to private hands in 2018, although national legislation has yet to denationalize the resource and no private extraction has yet begun. .

“Some people think Bolivia will ‘miss the boat’ in lithium,” said economist Juan Carlos Zuleta. “I don’t think that will happen.”

The real question, he said, is: when the ship arrives, “will lithium mining benefit Bolivians?”

All three countries are now looking to battery manufacturing — perhaps even building electric cars — as a way to turn the natural wealth of lithium into a modern industrial revolution.

“There is a concrete possibility for Latin America to become the next China,” Zuleta said.

In the meantime, the Lithium Hotel is empty.

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