World experiencing high lithium prices partially because indigenous people are blocking billionaires from mining it

Indigenous peoples and progressive governments in this part of South America (dubbed the “Lithium Triangle”) are making it difficult for multinational corporations to take advantage of locals the way they have in the past:

[T]his California-sized chunk of terrain accounts for some 55% of the world’s known deposits of the metal, a key component in electric-vehicle batteries.

As the Chinese EV giant BYD Co. recently learned, tapping into that resource can be a challenge. Earlier this year, after BYD won a government contract to mine lithium, indigenous residents took to the streets, demanding the tender be canceled over concerns about the impact on local water supplies. In June, the Chilean Supreme Court threw out the award, saying the government failed to consult with indigenous people first.

“They want to produce more and more lithium, but we’re the ones who pay the price,” said Lady Sandón, president of one of two Atacameño indigenous hamlets that filed a lawsuit against the auction. A BYD spokeswoman declined to comment.

Similar setbacks are occurring around the so-called Lithium Triangle, which overlaps parts of Chile, Bolivia and Argentina. Production has suffered at the hands of leftist governments angling for greater control over the mineral and a bigger share of profits, as well as from environmental concerns and greater activism by local Andean communities who fear being left out while outsiders get rich.

At a time of exploding demand that has sent lithium prices up 750% since the start of 2021, industry analysts worry that South America could become a major bottleneck for growth in electric vehicles.

“All the major car makers are completely on board with electric vehicles now,” said Brian Jaskula, a lithium expert at the U.S. Geological Survey. “But the lithium may just not be enough.”

In Bolivia, the government nationalized its lithium industry years ago and has yet to produce meaningful amounts of the metal. Mexico, a smaller player, also recently nationalized lithium. In Argentina, output is only starting to take off.

It will be difficult for some government officials, left-wing or not, to resist the allure of big riches to those who cave to the mining companies. Somebody, somewhere is going to cut a back-room deal, eventually. It’s human nature to be greedy.

So it’s good to know that much of the bottleneck holding the millionaires and billionaires back from exploiting the land and the people is judicial and not legislative. That decision by the Chilean Supreme Court was huge.

You can read the rest of Ryan Dube’s Wall Street Journal article here.

You can read an article about the dangers of lithium mining in South America at this link. And another at this link.

A lithium evaporation pool in the Lithium Triangle.

Leave a Reply