Bolivia: German lithium dream threatens to collapse

RIO DE JANEIRO, BRAZIL – “The environmentally friendly extraction of the raw material lithium and the fair partnership with Bolivia are the basis of our actions,” reads the German company ACISA website.

In December 2018, the German company entered a new business partnership with the South American country. Then, both parties had pinned high hopes on the project. Political figures from both countries even attended the signing of the contract.

Lithium is needed for producing electric car batteries and is therefore vital for changing transport models, saying goodbye to fossil combustion engines, and giving more impetus to electric mobility.

SIX COMPANIES, NONE FROM GERMANY

Almost four years later, the euphoria can only be felt on the Bolivian side: “The lithium era has begun,” read the local portal EJU a few days ago, which estimated future revenues at US$2 billion per year and spoke of a production volume of 40,000 tons per year by the end of 2024.

However, the German component of the project was no longer mentioned anywhere.

A few days ago, Bolivia announced that the six shortlisted companies with which the country has made progress in negotiations are from the USA, Canada, and China.

There is no longer any talk of German cooperation, although the Bolivian Minister of Energy, Franklin Molina Ortiz, stated that “so far, only declarations of intent have been signed; there are no valid contracts”.

POWER STRUGGLE IN THE BACKGROUND

ACISA’s cooperation was overshadowed from the outset by political unrest: a few months after signing the contract to set up the German-Bolivian joint venture that would undertake the project protests against it began in the region around the Salar de Uyuni.

Its opponents argued that Bolivia was not doing well, and ACISA was too small for the project’s magnitude.

To make matters worse, then-President Evo Morales resigned amid other protests following the controversial 2019 elections.

When he spoke of a coup d’état against him, for which he blamed, among other factors, international interests in the Bolivian lithium deposits, the decision on who would collaborate with Bolivia was politicized.

PRESIDENT LUIS ARCE MUST MAKE STRATEGIC DECISIONS

Meanwhile, Morales’ successor, Luis Arce, has come under fire. According to Bolivian media, his son would play a key role in deciding who would be awarded the contract. “Rumors and little transparency”, commented the Erbol portal on the decision to award the project.

For President Arce, who is also under increasing pressure from Morales, it is vital to make strategically intelligent decisions for his country. “We need partners, not owners,” Morales said years ago, thus raising the bar for cooperation with foreign partners.

SETBACK FOR GERMANY

The German company, ACISA, founded to create the German-Bolivian joint venture that would exploit lithium in the Andean country, specified on June 13 that the tender, in which six consortia have been shortlisted, is a project for the selection of technology for the direct extraction of lithium from the brine of the Salar de Uyuni.

Following the decision, this technology should be used by the state-owned company YLB. According to Bolivian law, raw materials from primary sources (such as brine from the Salar de Uyuni) can only be obtained by the State.

This project is entirely independent of ACISA’s project, i.e., lithium extraction from the residual brine, the German company stresses.

But, while Canadians, Americans, and Chinese continue to progress, the Germans admit that “as far as the current status of our project is concerned, we can only say that negotiations are still very difficult due to Bolivia’s situation”.

Or, to put it optimistically: the situation is at a standstill.

With information from DW