South America’s lithium mines sparkle turquoise blue with white sprinkles in the desert. The color spectacle of the quarries contrasts with the wasteland of the surrounding landscape. The lithium mines in the border area between Argentina, Bolivia and Chile are a good hope for the South American countries. At the same time, however, they are also a cause for concern – especially because of their high water consumption in the drought-stricken region.
In Salinas Grandes, a salt desert in Argentina’s Salta province, a roadside protest sign proclaims, “No to lithium, yes to water and life.” Each lithium factory consumes millions of liters of water per day.
The “Oil of the 21st Century”
But the white metal is considered the “crude of the 21st century”. It is used to make batteries for electric cars and is also found in cell phones and other electronic devices. Lithium exports will therefore also be the subject of the trip of Chancellor Olaf Scholz (SPD), who will visit Argentina, Chile and Brazil from Saturday to Wednesday. The chancellor is accompanied by a business delegation.
For example, unlike China, Germany shied away from participating in lithium mining, which government circles in Berlin say is a “challenging thing” in terms of social and environmental issues. “Today we can no longer afford that luxury if we really want to stand on our own two feet and really have our own sources of supply.”
The price of lithium has skyrocketed in recent years, from $5,700 a ton in 2020 to more than $65,000 last year, according to benchmark mineral intelligence.
Between hope and uncertainty
The expectations of this metal in the South American mining countries are correspondingly high. The desert regions of Argentina, Bolivia and Chile hide 56 percent of the 89 million tons of lithium identified worldwide, according to a 2022 report from the US Geological Survey.
In Chile, lithium comes from the Atacama Desert in the north of the country. But there is uncertainty among the residents. “We want to know exactly what the actual impact is of pumping out the groundwater,” said Claudia Pérez, a San Pedro Valley resident who works on a government support program for indigenous communities.
The rights for lithium mining in the Atacama Desert are held by US group Albemarle and Chilean company SQM, who are already paying millions in compensation to surrounding communities. Still, communities fear agriculture for their livelihoods.
A 2013 site survey showed that one-third of hardy, deep-rooted carob trees had died — from lack of water, according to a later study. According to its own statements, SQM will consume an average of 400,000 liters per hour for its factory in 2022.
Important source of income for Chile
According to the USGS, lithium from the Atacama Desert accounted for 26 percent of global production in 2021, making Chile second among global lithium producers after Australia. Albemarle and SQM must hand over 40 percent of their lithium sales proceeds to the Chilean government. As early as the first half of 2022, Chile’s tax revenue from lithium surpassed that from copper – Chile is the largest copper producer in the world.
In Argentina, on the other side of the Andes, lithium mining is also causing fear in affected communities. Verónica Chávez, leader of the Kolla Santuario de Tres Pozos indigenous community in Jujuy province, said: “What they say they are going to save the planet is not true. On the contrary, we should give our lives to save (him). We don’t eat lithium or batteries. We drink water,” she told an AFP team of reporters as she stood in front of a huge mountain of salt harvested by a local cooperative.
Bordering the north, Bolivia is home to the world’s largest salt lake, the Salar de Uyuni, which covers more than 10,000 square kilometers. According to the USGS, it contains a quarter of the world’s lithium reserves – in an area marked by great poverty.
However, the countries of the lithium triangle do not only want to supply the coveted metal. They plan industrial recycling on site. “South America has all the necessary raw materials to produce batteries and electric vehicles,” emphasizes Argentina economist Juan Carlos Zuleta. This offers the “concrete opportunity for South America to become the next China”.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
