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Russia and China take the lead in rush for Bolivia’s lithium

Russia, just like China, has gained access to Bolivia’s lithium reserves, estimated at 23 million tons, and believed to be the richest known lithium deposits in the world. Bolivia’s seeming preference for China and Russia has experts worried, however, due to both countries’ low environmental standards and regulations for their companies and risks of corruption and inefficiency, among other issues.

Aerial view of Bolivia’s first state-owned lithium carbonate plant in the municipality of Colcha K, south of the Salar de Uyuni, in the department of Potosi, Bolivia, on December 15, 2023. (Photo: Jorge Bernal/AFP)

The Bolivian government has already signed agreements with the Chinese consortium CATL BRUNP & CMOC (CBC), and the company Citic Guoan Group. In mid-December 2023, Bolivia also signed a $450 million deal with Russian state firm Uranium One Group, a subsidiary of Rosatom, giving Russia access to its reserves.

Under the agreement, the Russian firm will invest in Bolivia over two years in a pilot lithium production project in the community of Colcha K, in the department of Potosi, in three phases. In the first phase, the goal is to produce 1,000 tons of lithium carbonate per year, in the second phase up to 8,000 tons, and an additional 5,000 tons in the third phase. The contract is the second signed with Uranium One Group. In the first, in June 2023, the contracting parties agreed to build a lithium carbonate industrial complex in Pastos Grandes, in southwest Bolivia.

As Russia takes a key role in the extraction of lithium in Bolivia, experts worry about a potential environmental disaster. “Where Russia has handled energy resources, environmental incidents have been commonplace,” Joseph Bouchard, a Canadian analyst focusing on geopolitics and security in Latin America, wrote in an opinion piece for environmental news site Mongabay.

As for China, the first agreement was made in January 2023 with the CBC consortium, under the leadership of CATL, to invest a total of $1.4 billion in the installation of two industrial plants for the direct extraction of lithium in the Salar de Uyuni, the world’s largest salt desert. In June 2023, Bolivia signed a contract with Citic Guoan for the right to exploit lithium reserves in the Salar de Uyuni. More recently, on January 18, 2024, the CBC consortium signed another agreement deepening its cooperation in lithium exploration in the Salar de Uyuni, with an additional investment of $90 million.

Among the concerns with CATL are its link to Uyghur forced labor, the Diplomat reported. “A large chunk of China’s lithium processing and product manufacturing facilities are located in the Xinjiang Uyghur Autonomous Region, where China has been credibly accused of the mass internment and forced labor of Uyghurs and other minority groups,” the Diplomat reported. “Sectors such as mining, farming, and manufacturing are tainted by Uyghur forced labor, which is then tied to global supply chains.”

Professor Stella Christina Schrijnemaekers, coordinator of the International Relations, Foreign Trade, and Logistics courses at the University Center of the United Metropolitan Colleges in São Paulo, believes that it is vital for the country’s defense to be concerned about the negative socio-environmental effects in relation to the countries that win the bids. The two powers that came out on top have a history of human and labor rights violations, as well as disrespect for the environment.

“All countries must pay attention to human and labor rights issues in their own country, regardless of the actions of companies, whether national or multinational. Unfortunately, violations of laws and human rights, as well as misuse of natural resources, are not the prerogative of Russia or China,” Professor Schrijnemaekers told Diálogo. “It will be up to Bolivia to be vigilant,” she concluded.

Source: Dialogo Americas
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