“With lithium, Latin America is in danger of repeating the extractivism movie of its minerals in exchange for a few coins”

“These 3 countries they contain between 60% and 80% of the world’s reserves these ores. Although in each of them the story is very different,” Ernesto Picco, full professor and researcher at the National University of Santiago del Estero (UNSE), in Argentina, says in this interview with BBC Mundo.

In order to find out what kind of transformation is taking place, Picco embarked on a journey into the bowels of the desert and recounts it in his book “Lithian Chronicles: South America in dispute over the future of global energy“.

“The price of lithium worldwide has increased 18 times in the last 10 years,” he says, supporting global interest in its extraction.

Precisely because of its price and how cheap it is to extract it in Latin America thanks to low labor costs, low corporate taxation and relaxation of environmental protection lawsmany companies from the United States, Australia, Canada or South Korea are already operating in Latin American salt pans.

But there is a risk, says Picco, and that is nothing more than “going to a movie we’ve seen in the past” and repeating the same mistakes, he says, referring to extractivism of natural resources in Latin America which fueled the growth of Northern Hemisphere economies leaving little profit in the South.

Based on these models of development in Latin American countries exploitation and export of raw materialswithout added value, it has consequences for politics and society, but also for the ecosystems and communities that live around it.

“The true potential of this mineral, which until recently was extracted from the desert without much fanfare, was discovered in the 21st century. But there are already scientists and social organizations warning that this economic transformation is a fantasy. Or, in the worst case, that it can be true at the cost of ecological and social disaster,” he explains.

The Argentinian journalist and researcher spoke to BBC Mundo as part of the Arequipa Hay Festival.

What is the “lithium triangle”?

It is a way of naming a region that includes northern Argentina, northern Chile, and southern Bolivia.

Beyond the political borders, it is a geographically, demographically and culturally very similar area.

There is not much difference between the Atacameños of northern Argentina and northern Chile, for example.

These are all populations that, they say, have been living there for 4,000 years.

These are areas with mostly desert geography, where families live very isolated from each other and survive by grazing.

Some make a living from salt or livestock farming.

We are talking about places where big companies and lithium extraction factories are starting to come.

what a processwith chemicals are used to extract lithium?

What the companies do is drill into the crust of the salt flats, pump the salt water – which is groundwater – and pour it into basins that are square kilometers in area.

This is left to evaporate in the sun and, once evaporated, a range of minerals and metals remain in the sediment to be processed in chemical plants.

Lithium carbonate or some other variant of it is extracted from there.

What did you find when you got there?

One of the things that surprised me the most is that the plants reach very isolated places, where you can’t see them.

These are remote places, difficult to access, where it is easy for what happens to go unnoticed.

So what’s going on?

Communities condemn the problem of vegas (fertile lands) drying up, polluted rivers…

For example, the impact on air or soil of residues that accumulate near extraction plants is not known.

There are studies in Chile on how this has affected the fauna.

Everything indicates that the impact on the environment is strong, and to the extent that the number of companies coming starts to multiply, which will probably happen in the next five or six years, the impact will certainly be much greater compared to the economic benefit that will be have to see if it is justified.

What caught your attention the most during the trip?

The different way in which three countries – Argentina, Bolivia and Chile – solved the situation of finding themselves with a strategic natural resource on a global level.

Bolivia tried to move forward with a nationalization strategy.

Argentina’s model is much more closely related to the legal framework of the 1990s, where provinces and federal states compete with each other to bring in companies that offer better benefits and perks.

And Chile with one more hanging thing.

It started with a more private phase with a clean and solid sense of business, and now – with the new government of Gabriel Borich – it is trying to create a state-owned company.

In other words, the framework is very different in these three countries, where the geography is very similar, the cultures are very similar, but the politics are very nuanced.

Do you think one option is better than the other?

We will actually know this with time and it depends on the perspective from which we see it.

If one thinks about the possibility of industrialization and moving up the value chain, Bolivia’s bet is a long-term one that clearly did not pay off immediately.

Because the level of production was lower and it was more difficult to progress, but perhaps in the future they will find themselves with sovereign control of their resources and benefits to the country in a more general way.

In the case of Argentina, we have been here since the 1990s, at least with an extractivist scheme pure and simple, which leaves very little benefit for the country.

Now the situation is starting to change.

Between the end of last year and the beginning of this year, what is called the National Lithium Committee began to form, where the three provinces linked to the national government are beginning to unite – rather than compete with each other – to create greater benefits and strategic progress.

I think in Latin America a different process is starting to move up the value chain.

For example, battery production.

This already implies at least positioning and shows that we want to be something more than mere exporters of natural resources, because as progress is made, the profit increases many times over, and the state gets more and more benefits.

In your book, you state that what is extracted, for example, in the Salar del Hombre Muerto in Argentina, is processed in facilities in the United States or China. Has Latin America again fallen into the trap of selling its mineral wealth without much participation in the value chain, which leaves more money behind?

The increase in demand will attract companies from the United States, China, Canada, Australia or South Korea.

On the one hand, you will have a huge impact on the environment, and on the other, you will have an increase in the situation of extractivism.

If Argentina had not decided to stop being just a supplier of natural resources and start industrializing them, we would obviously be witnessing an old movie repeating itself in the front lines.

That we are eternal suppliers of natural resources that continue to impoverish and that ecosystems continue to be sacrificed at the expense of the northern hemisphere in exchange for a few pennies.

But there is one peculiarity in this film, which is that this time it is done in the name of the environment.

Lithium is being mined in the name of a greener future to surpass the use of fossil fuels.

But there seems to be a right to the environment in the North, which in the Southern Hemisphere is a commodity.

Who controls this business in Latin America?

Basically foreign capital and its companies.

There are communities that refuse their arrival and others that accept them in exchange for a series of benefits such as building roads, schools or creating jobs.

Do companies seem to have replaced the functions of the state?

Exactly. That’s one way companies have to get in.

Everything that is happening shows the problems that the state has in responding to the needs of the communities.

The northern provinces, at least in Argentina’s case, are historically the poorest provinces in the country.

And then these companies come to answer that and fill the void left by the state.

Is lithium transforming Latin American societies?

They transform. Which we don’t know whether for better or for worse.

But it is clear that we are talking about historically isolated and abandoned communities and territories that are suddenly in the public eye because of their existence and the increased demand for lithium.

The price of lithium in the world has increased 18 times in the last 10 years.

This implies that the increase in demand makes all these companies interested in extracting it.

That is already a transformation.

This article is part of the digital version of the Hay Festival Arequipa, a meeting of writers and thinkers that takes place in that Peruvian city between 3 and 6 November.

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