One of the most prominent conspiracy theories surrounding the recent overthrow of Bolivian President Evo Morales is that the military’s intervention was a coup to ensure US control of lithium.
Considered a critical resource, lithium is a key component of new technologies including car batteries, phones, electronic devices and sophisticated weapons systems – and recent reports suggest Bolivia could host around 30% of the world’s total of the raw material.
In media interviews, Morales has claimed his ousting is the result of a US-backed movement to establish a right-wing leader who will expose the South American nation’s lithium reserves to exploitation by industry.
But could a new leader mean a rush on Bolivia’s lithium by foreign companies, as he claims?
The ousting of Evo Morales
Bolivian President Evo Morales announced he was resigning on 10 November to ease violent protests that had been ongoing in the South American nation since a fiercely disputed election on 20 October.
In televised comments to media, Morales said he would submit his resignation to help restore stability but claims he is the victim of a “civic coup” and that the police had an “illegal” warrant for his arrest.
Vice President Alvaro Garcia Linera also resigned, along with several other allies of Morales including Mining Minister Cesar Navarro and Chamber of Deputies President Victor Borda, who both cited fear for the safety of their families as their motivation for stepping down.
As Bolivia’s first indigenous leader, Morales was considered a leftist icon and had been in power for almost 14 years.
Some of his left-wing allies in Latin America have denounced the events as a “coup” including Venezuelan President Nicolas Maduro, Argentine President-elect Alberto Fernandez and Nicaraguan President Daniel Ortega.
Under Morales, Bolivia had one of Latin America’s strongest economic growth rates and its poverty rate was cut in half, according to Reuters reports. However, his resolve to stay in power for a fourth term alienated many allies.
In addition, the Organisation of American States (OAS) conducted an audit of the October 20 election and declared it should be annulled due to “clear manipulations” of the voting system, which lead to Morales beating main rival Carlos Mesa by just over 10 percentage points.
Under Bolivian law, the head of the Senate is expected to take over provisionally in the absence of the president and vice president.
When Senate President Adriana Salvatierra also stepped down around the same time as Morales, Senator Jeanine Anez was declared the country’s interim president pending the results of new elections.
Lithium in Bolivia
According to US Geological Survey lithium data released in March, Bolivia contains almost 15% of the world’s known lithium resources – about 9 million tonnes of an estimated 62Mt.
Together with Argentina and Chile, it also makes up the so-called Lithium Triangle, which is estimated to host more than half of global resources.
However the US Geological Survey is said to be soon more than doubling its estimates of Bolivia’s lithium resources in an upcoming report, from 9Mt to 21Mt.
This estimate tops Argentina’s estimated 14.8Mt of resources, which would make Bolivia the country with the world’s largest lithium resources – equivalent to about 30% of the global total.
This update would also push the Lithium Triangle’s resources up to around two-thirds of the global total.
In addition, Bolivia holds the single largest deposit in Salar de Uyuni, a salt plain large enough to be seen from space.
In an interview with Russian TV network RT, Morales said the US-backed “coup” against him was aimed at installing a right-wing leader to open up Bolivia’s lithium reserves to exploitation by industry.
During his presidency, Morales has committed to nationalising the extraction of lithium to secure his country’s economic future.
“Some of the groups in whose hands of economic power are concentrated…cannot forgive us for nationalising our natural resources and strategic companies, which has improved Bolivia’s economic system,” he said.
“Upon the successful creation of a developed lithium industry, Mr Alvaro [Bolivian vice president, who also resigned with Morales] and I planned to set lithium prices on the world market. I realise though, that some industrialised countries are afraid to compete.”
“First, in the field of technological development, and second, they do not want other countries to follow in the example of our economic model, which is based on socialism,” Morales added.
In addition, he believed the OAS’ election audit report was “not based on a technical report but on a political decision”.
“I was called an authoritarian ruler, a dictator, but this is not so… New generations will now understand what a real dictator is,” Morales said.
In a televised interview, former Uruguay president Jose Mujica also raised his suspicions about lithium exploitation being a motive.
“Bolivia is very rich; it harbours an estimated 70% [sic] of the raw material needed to make new batteries. We all know that there is a global energy shift. I am not accusing anyone, because I have no proof, but I am just suspicious in light of history,” he said.
Will a new leader create more interest in Bolivia’s lithium by foreign companies?
Not necessarily. Several industry experts have disputed the theory that Morales’ overthrow was a lithium-motivated coup due to some fundamental flaws.
In 2018, the Bolivian government had signed two contracts totalling $3 billion for lithium development with Chinese and German companies.
The contract with German company ACI Systems was cancelled in early November, reportedly due to extraction difficulties, although it sparked speculation that Morales was the main obstacle.
However, factors leading to Morales’ overthrow have been in play for a long time before the end of the deal and there has been no indication that the next government will restore this German contract, or that similar issues won’t arise with the Chinese deal.
In addition, there is a big difference between having mineral resources in the ground and turning them into economically viable mineral reserves.
According to House Mountain Partners independent metals analyst Chris Berry, lithium is critical but is “not rare by any stretch of the imagination”.
“What is challenging is producing battery-grade lithium at scale – that’s more a scientific and chemical challenge than just finding this stuff and digging it out of the ground,” he told media.
The other Lithium Triangle countries, Argentina and Chile, have higher quality reserves of lithium and more favourable climate conditions for the type of lithium mining carried out in the region – making these locations much more appealing.
To extract lithium in Argentina and Chile, mining companies evaporate the layer of salty brine in the sun. Meanwhile, Bolivia’s main lithium formations are on lower, wetter ground, which makes evaporation take longer and thus, pushes up production costs.
Bolivia’s salt flats also have extremely high concentrations of magnesium, which also adds to extraction costs.
According to international affairs think tank Atlantic Council, the US has alternative ways to access lithium reserves – namely in Chile and Australia, which are both close allies.
“If we look at the potential interest that the United States might have in lithium reserves and combine the high economic cost, the existing technological barriers to extracting lithium and the political instability of the country, the risks are too high for American companies willing to get involved,” Atlantic Council associate director Reed Blakemore told media.
Mr Berry added that Bolivia has been a “no-go zone for a long time from a lithium investor perspective” and that producers such as those in Australia that get lithium from hard-rock mining will be much more competitive.
“Hard rock generates good returns, so investors don’t need to go into Bolivia,” he said.
The current situation in Bolivia
According to media reports, more than 30 people have died in the clashes between protestors and security forces since the October election, with most deaths occurring after Morales’ resignation.
Over the weekend, news arose that President Anez had passed a law that limits presidents to two terms and appoints a new board that will set a date for a general election.
Morales has now relocated to Mexico, where he has been granted asylum.
His Movement to Socialism party, which controls a majority of seats in Congress, has agreed to find a new candidate to run in the next election.