"No to lithium" reads a sign erected in Salinas Grandes by local indigenous communities, who depend on the salt flats for tourism and to harvest salt, in the northwest of Argentina. In February 2019 they blocked the nearest highway, which runs to Chile, for nearly two weeks, halting exploration for lithium by a mining company. Credit: Daniel Gutman/IPS

By Daniel Gutman
OLAROZ, Argentina , Dec 18 2019 (IPS)

The intense white brightness of the salt flats interrupts the arid monotony of the Puna in northwest Argentina, resembling postcards from the moon. Beneath its surface are concealed the world’s largest reserves of lithium, the key mineral in the transition to clean energy, the mining of which has triggered controversy.

The debate is not only about the environmental impact but also about how real are the benefits for the local communities of this region located more than 4,000 metres above sea level, where people unaccustomed to the Andes highlands have a hard time breathing.

“I have no doubt that our province is destined to play a key role in the coming years, which will be marked by the abandonment of fossil fuels,” Carlos Oehler, president of the Jujuy Energy and Mining State Society (Jemse), told IPS.

“It’s an opportunity for development. And the people who only emphasise the environmental impact do so out of ignorance,” he argued, at the company’s headquarters in Salvador, the capital of the province of Jujuy.

Jemse, which is owned by the province – bordering Bolivia and Chile – has been producing lithium since 2014 in the Olaroz salt flats, through Sales de Jujuy, a public-private partnership with Australia’s Orocobre and Japan’s Toyota Tsusho.

The participation of Toyota Tsusho – part of the Toyota conglomerate – is a reflection of the international interest in lithium for the production of batteries for electric vehicles, a market expected to boom in the coming years in industrialised countries.

The impact of lithium mining in the Puna region of Jujuy is limited for now and differs depending on the area, IPS saw first-hand during a several-day tour through the scattered towns and villages of this rugged Andes plateau region.

Several of these communities, mostly populated by indigenous Kolla people, became Solar Villages this year – a provincial project that harnesses the abundant sunlight of the Puna region to bring electricity to remote villages.

A few km from the Salar de Olaroz salt flats is the village of the same name, made up of a few dozen adobe houses and reached by a desolate dirt road.

A street in Olaroz, the village near the salt flats of the same name in the northwest Argentine province of Jujuy, where lithium mining provides stable work for some of the local inhabitants, in an area where communities have traditionally raised llamas and sheep for a living. Credit: Daniel Gutman/IPS

A few “pros”…

Last year, the town’s first secondary school opened its doors. It is a vocational-technical institution with an orientation in chemistry, which aims precisely to train young people about lithium.

In addition, lithium has brought stable jobs to a poor region, where a majority of the population depends on llama and sheep farming. Mirta Irades, principal of the Olaroz primary school, told IPS: “Everyone here wants to work at the mining company, even if it’s just washing the dishes.”

The real benefits, however, are modest. According to a report presented by the national and provincial governments in November, only 162 people, or 42 percent of those working in the Sales de Jujuy company, come from local communities.

In total, the document says, direct mining employment in Jujuy increased from 1,287 jobs in 2006 to 2,244 in 2018, with lithium mining accounting for three-quarters of the growth. That is just 3.5 percent of registered employment in the province, although wages are more than double the overall average.

The timeframes involved in lithium production are another hurdle.

Sales de Jujuy is the only company in the province that is commercially mining lithium. There are dozens of other companies working, but exploration, pilot tests, the installation of processing plants and other previous tasks can take up to 10 years.

Two men from indigenous communities near Salinas Grandes pick up bags of salt harvested by members of the local cooperative. Villages around Salinas Grandes have blocked attempts to mine lithium in the area. Credit: Daniel Gutman/IPS

There is only one other company already mining lithium in the entire northwest of Argentina, which is also made up of the provinces of Salta and Catamarca.

This is the area that, along with northern Chile and southern Bolivia, comprises the so-called Lithium Triangle, which concentrates 67 percent of the world’s proven reserves of the mineral, with Argentina at the head, according to data from the U.S. Geological Survey.

…and several “cons”

But those who are skeptical about lithium’s potential for the region point out that South American countries are once again falling into the role of mere producers of primary products, as in the case of agricultural and livestock exports.

This is crudely reflected in Olaroz, one of the Solar Villages that is supplied with electricity by a small local solar park, which like the others in the programme runs 24 hours a day thanks to lithium batteries.

But the batteries are imported from China, since neither Argentina nor the rest of South America has the technology to manufacture them.

When you walk through communities in Jujuy’s Puna region, there are places where people don’t even want to hear lithium mentioned.

In Salinas Grandes, another giant white sea of salt, located about 100 km from Olaroz, no mining company has been able to gain a foothold due to opposition from the 33 indigenous communities in the area.

Two indigenous women wait for customers at a craft stand in Salinas Grandes, in the Puna highlands region in northwestern Argentina. The tourist routes through the immense salt flats that break up the arid landscape here are an alternative created by the local indigenous communities to boost their income. Credit: Daniel Gutman/IPS

“This is our territory, we decided that lithium will not be mined here, and they are going to have to respect us,” Verónica Chávez told IPS, while participating in an assembly of some 100 members of indigenous communities in the middle of the salt flats.

Chávez lives in the village of Santuario Tres Pozos, home to some 30 families, and she is a member of the local cooperative that brings together indigenous families who work harvesting salt, using the same techniques their ancestors used for centuries.

“All the promises they make to us with the arrival of the lithium companies are lies. Lithium is food for today and hunger for tomorrow,” adds Chávez.

Local alternatives

Four years ago the communities in Salinas Grandes embarked on another activity: guided tours and the sale of handicrafts to Argentine and foreign tourists attracted by the seemingly endless white landscape that glitters in the sunlight.

Alicia Chalabe, a lawyer for the indigenous populations of Salinas Grandes, says no economic offer will manage to modify the situation. “The communities live close to the salt flats and use the territory, which for them has a very important historical, cultural and patrimonial value,” she told IPS.

“In the Olaroz area, the situation is different because the communities never used the salt flats,” she adds.

A sign marks the entrance to Sales de Jujuy, one of the only two companies that mines and sells lithium in Argentina, the country with the largest proven reserves. It operates in the Olaroz salt flats and is made up of the Australian company Orocobre, Japan’s Toyota and a public enterprise from the province of Jujuy, in the northwest of Argentina. Credit Daniel Gutman/IPS

In February, the communities of Salinas Grandes staged a nearly two-week roadblock on national highway 52, which connects Argentina with Chile, successfully bringing to a halt the exploration work that a lithium mining company had begun in the area without the approval of the local indigenous population.

The resistance in Salinas Grandes is based in part on studies by Marcelo Sticco, a hydrogeologist at the University of Buenos Aires (UBA), who points out that lithium extraction puts community water sources at risk in a desert area where rain is a very sporadic luxury.

“The studies we carried out are conclusive,” Sticco told IPS from the Argentine capital. “Lithium is separated through the evaporation of enormous quantities of water, which fuels the salinisation of the groundwater used for consumption in the region.”

The government of Jujuy has a project to add value to lithium in the province: it partnered with the Italian electronics group SERI, which could locally install a battery assembly plant, with the aim of moving towards electric urban public transport.

This initiative, if implemented, could modify a scenario that for now does not offer significant concrete benefits, even though many in Argentina are already counting on the wealth that the so-called “white gold” will bring.

But although Argentina’s lithium exports have been growing, they reached just 251 million dollars in 2018, a mere 6.5 percent of the country’s mining exports.

However, Oehler, the president of Jemse, believes that the peak in international demand for lithium has not yet arrived: “It will peak between 2025 and 2030 and we have to take advantage of it to grow and to improve the lives of our communities,” he said.

But some experts fear the consequences of staking too much on this mineral, which could soon be outdated by a new technology that reduces or eliminates its current attraction.

Lithium has many uses, but it is most coveted as a heat conductor in rechargeable batteries.

These are used in cell phones, in the storage of different renewable energies, especially solar power, and in electric vehicles, the use of which is projected to steadily increase, especially in public transport, as they push aside fossil-fuel vehicles as part of the effort to curb global warming.

The effort to search for lithium in the Salar de Caucharí-Olaroz, in the province of Jujuy, is a project developed by the Exar mining company, a joint venture between Canadian Lithium Americas Corp (LAC) and the Chilean Sociedad Química y Minera (SQM). In total, there are 53 projects in the exploration or project feasibility phases. Credit: Mining Chamber of Commerce of the Province of Jujuy

By Daniel Gutman
BUENOS AIRES, Jan 11 2018 (IPS)

The government of Mauricio Macri dreams of Argentina becoming the world leader in lithium production. But it does not seem so clear that this aspiration, underpinned by the interest of multinational corporations, would also drive the development of local communities.

With just two projects in operation, Argentina today contributes some 40,000 tons per year of that key chemical element for batteries that are used around the world in, for example, cell phones and electric cars, representing 16 percent of global production, according to data from Argentina’s Energy and Mining Ministry (MinEM).

But these numbers are expected to increase significantly in the near future, because the main international companies engaged in this business – strongly linked to the energy transition from fossil fuels to clean sources – have already landed in Argentina.

Thus, in the last two years the sector has received nearly two billion dollars in foreign investment, and today there are no less than 53 projects in the phases of exploration or technical and economic feasibility studies, which cover a total area of 876,000 hectares in the northwest of the country, according to MinEM.

“In Argentina what we can do so far is extract lithium carbonate. The problem is that we do not have the technology or the patents for the assembly of the batteries,” economist Benito Carlos Aramayo told IPS.

“As a result, lithium will not change the production model of the northwest of the country, which is the production of raw materials. It will only expand it a little, because today we depend mainly on sugarcane and tobacco,” added Aramayo, assistant dean of the Faculty of Humanities at the National University of Jujuy.

The llama is the animal best adapted to the arid conditions of the Argentinean region of the Puna de Atacama. The photo shows a group of llamas near a salt flat where exploration for lithium is being carried out. Credit: Mining Chamber of Commerce of the Province of Jujuy

Together with Salta and Catamarca, Jujuy is one of the northwestern provinces that account for most of the country’s lithium reserves. In fact, of the 53 projects that are expected to begin to operate soon, 48 are in these three provinces, in the Puna ecoregion.

The Puna is an arid zone, with salt flats that are over 4,000 meters above sea level, which is part of what has been called the “Lithium Triangle”, and includes northern Chile and southwestern Bolivia. In recent years, different scientific reports have pointed out that the region has approximately half of the world’s lithium reserves.

Chile has led the world market in recent years, but at present big investors in the sector seem to be looking towards Argentina, just as global demand for lithium is expected to rise threefold by 2025.

The intense exploratory activity carried out recently in the Argentine Puna increased the country’s lithium reserves, which in 2015 were estimated at 6.3 percent of the global total, compared to 13.8 percent today.

This growth was shown in a report jointly prepared by the U.S. Geological Survey (USGS) and Argentina’s Geological and Mining Service (SEGEMAR), which was made public in late November 2017.

“Argentina can become the world’s leading lithium exporter,” said Tom Schneberger, vice president of FMC Lithium, which through its subsidiary Minera del Altiplano produces some 22,500 tons of lithium a year in the Salar del Hombre Muerto, in the northwestern province of Catamarca.

In November, Schneberger announced investments for 300 million dollars with the objective of doubling the production in the salt flat by 2019, and gave two reasons to justify the company’s expectation: increased global demand and the “clear rules” set by the Macri administration.

“The previous government’s policies offered few certainties,” he said.

The question is whether the exploitation of lithium reserves can bring benefits to the inhabitants of northwestern Argentina, a particularly impoverished area that has been increasingly in decline in recent years.

According to a paper by Aramayo, the province of Jujuy accounted for just 1.3 percent of Argentina’s GDP in 1980, and for only 0.6 percent this decade.

Historian Bruno Fornillo, who has researched what he calls “the geopolitics of lithium,” wrote that “the profits of the lithium energy industry – as in the case of the processing of all raw materials since the very start of capitalism – rise as you go up the value chain”.

Fornillo sees lithium as a possible tool for a new model of development and urges that local activity not be restricted to the extraction of the metal, but that it move towards the manufacturing of batteries, which requires a strong production of scientific knowledge.

This would, of course, involve the difficult task of breaking with the export and extractivist model.

“The extraction of lithium has things in common with other extractivisms, which are disguised as industries, but they are not, because they produce nothing, they only extract,” naturalist Claudio Bertonatti, an adviser to the Félix de Azara environmental foundation, told IPS.

“These industries have such economic power that they tend to overpower institutions in poor regions. And until a while ago they were associated with neoliberal governments, but lately we have realised that these companies have such power that the extractivism does not change, regardless of who is in the government,” he added.

The process of extracting lithium in the salt flats begins with the pumping of brine and continues with a long process of evaporation. Thus, using chemical substances, lithium is separated from other salts.

It is a similar method, although on an industrial scale, to the one used for generations to produce salt by the indigenous populations of the area, who have lived for thousands of years in the region where the lithium reserves are concentrated.

The indigenous property of many of the territories is also a source of conflict and, in fact, 33 communities from the provinces of Salta and Jujuy filed a claim in 2010 with Argentina’s Supreme Court, to try to assert their right to to be consulted, but was rejected by the highest court for formal reasons.

Later, in 2015, the same communities presented a consultation protocol that respects the principles and ancestral values of their peoples, the Kolla and Atacama, called Kachi Yupi (“Footprints of Salt”, in their native language). The document was delivered to the authorities to be used in any project that could affect them.

The Chilean government’s decision to invite companies to tender offers for mine lithium resources has been widely rejected by mining trade unions and legislators of the opposition.

These sectors demand that lithium be nationalised to reverse – at least symbolically – what they refer to as the process of natural resource “expropriation” of the last two decades.

“Mining is one of the key elements that Chile has for financing social programmes, which is why we are concerned over how governments have acted since the return to democracy in 1990, renouncing our sovereignty in favour of multinational corporations that leave next to nothing in the state’s coffers,” Jedry Velis, general secretary of the Confederation of Copper Workers (CTC), the union of outsourced copper workers, told IPS.

Lithium, a soft and light metal, is found in abundance in the salt flats of northern Chile, in the Atacama Desert, the world’s driest desert.

It has long been used in the manufacture of lubricants and heat resistant glass, as well as in the pharmaceutical industry. In the last 20 years it has also been a key component of rechargeable batteries for cell phones, portable computers and digital cameras and it has a great potential in the development of electric cars.

Because of its use in battery applications, by the year 2020 the lithium industry is expected to have grown more than seven percent, and the price of the metal will continue on the rise. In the last decade, prices saw an increase of more than 200 percent.

In this context, the right-wing government of Sebastián Piñera launched a bidding process for the extraction of up to 100,000 tonnes of lithium over a 20-year period.

On Sep. 27, the government will announce the name of the company awarded the extraction rights. The operating contract is expected to bring in nearly 350 million dollars for the government, according to official estimates.

The contract includes the payment of a monthly royalty equivalent to seven percent of the company’s net lithium sales. This percentage, the government says, is in line with that earned by other lithium producing nations, like Australia and Argentina.

But legislators of the opposing central-left Concertación por la Democracia (Coalition of Parties for Democracy) argue that that percentage is nothing compared to the benefits that would be obtained if lithium extraction operations were conducted directly by the state.

And mining unions insist that the government has to authorise a special fund for the state-owned copper company Corporación del Cobre (Codelco) to extract and produce the mineral.

The Federation of Copper Workers (FTC), which represents Codelco plant workers, cautioned that the tendering of “a strategic resource” merely “reflects the privatising policy” of the government.

Chile reformed its mining laws during the dictatorship of Augusto Pinochet (1973-1990) and opened the industry up to private investment, focusing on copper, the country main source of wealth, and established distinctions between “concessionable” minerals (minerals for which concessions could be granted) and “non-concessionable” minerals.

Most minerals were included in the first category, thus effectively doing away with one of the most notable gains of the socialist government of Salvador Allende (1970-1973): copper nationalisation.

But lithium was classified as non-concessionable because it was considered a “strategic” resource for its potential use in nuclear fusion reactors. And, as stipulated in the national constitution, production of such resources can only be in the hands of the state or contracted out through special agreements.

When mining laws were amended, however, there were two lithium extraction and production concessions, which were exempted from this ban and which are now responsible for Chile’s production of this metal.

Chile is currently the largest producer of lithium in the world, with 41 percent, followed by Australia, China and Argentina. It exports to Belgium, China, Germany, Japan, South Korea and the United States.

South America has 75 percent of the world’s lithium reserves, and the countries in the region with the largest deposits are Bolivia, with 35 percent, and Chile, with 20 percent.

Under the tender process announced, the government will award a special operating contract, as stipulated in the constitution for exceptional cases.

According to the CTC, the government is “circumventing the constitutional ban to avoid an amendment,” for which it would need the approval of the opposition.

Codelco announced in late July that it would purchase the bidding documents to study the possibility of making an offer.

This prompted mixed reactions from Codelco workers, even though they all agree that Codelco should be involved.

“We think the government and the state should adopt a fixed policy of exploiting the country’s resources to raise state revenue,” Velis said.

In contrast, mining undersecretary Pablo Wagner said Codelco can engage in lithium production directly, as it owns deposits, but that the state needs to allow private investors to make their bids so that Chile can compete with other lithium producing countries around the world.

According to Jaime Alee, director of the Lithium Innovation Centre of the University of Chile’s School of Physics and Mathematics, the lithium debate is “political”.

“Lithium is a very cheap and abundant product, which has absolutely no economic repercussions for the country, neither now or in the future, so that this whole discussion doesn’t make much sense,” he told IPS.

In his opinion, the debate should focus on the mineral’s potential added value. “That’s something that we should be conscious of and we should concern ourselves with,” he said.

Chile’s economy depends on exports of raw materials, and if the country wants to advance to a higher stage of development, it needs to train human resources and create added value, he argued.

“If it just goes on selling agricultural commodities, copper and minerals, it will never be more than a middle-level country, like so many others that have, for example, oil and yet are not rich,” he said.

For Velis, putting raw material production in the hands of the state would help reduce the gap between rich and poor, which is one of Latin America’s greatest inequalities.

As an example, the trade unionist mentioned Argentina’s nationalisation of the oil company YPF in May of this year.

“We pay close attention when a neighbouring government or state implements policies aimed at effectively reducing inequality,” Velis said. “Argentina is, without a doubt, a model for us.”