During his trip to South America, Chancellor Scholz will also talk about lithium. The long overdue processing of missed opportunities begins. Berlin is currently lagging behind in the battle for the raw material of the future.
White Gold: Raw material for the production of Lithium Carbonate
Around 57 percent of the world's lithium deposits are located in the country triangle of Argentina, Bolivia and Chile. The raw material is in great demand because it is used to produce batteries for electric cars. The Chinese are big on business, having invested billions worldwide in a strategic pool position. The USA is also better positioned than the Europeans.
The car nation Germany, on the other hand, is lagging behind. It is therefore necessary to do some follow-up work when Chancellor Olaf Scholz travels to Argentina, Chile and Brazil from the weekend. “In comparison to China, but also to other countries, Germany is not yet very present in the lithium triangle of South America. At least there are approaches to change that,” says Carl Moses, economic expert and consultant from Buenos Aires in an interview with DW.
Aerial view of brine pools and processing areas of the lithium mine of the Chilean company SQM (Sociedad Quimica Minera) in the Atacama Desert in Chile
Beijing instead of Berlin
In Chile and Argentina, German companies are in a good starting position, but the really big breakthrough has not yet happened. “In this strategically important issue, I lack a regulatory or at least coordinating hand, which can only come from the state. We need German consortia in which important players work together at all stages of the value chain,” Moses says, encouraging a coordinated effort by German industry and politics on.
Chinese lead is most evident in Bolivia. A German-Bolivian joint venture should actually lead to effective cooperation there. But home-made mistakes, political unrest in Bolivia, distrust from the local population and a preference for China on the part of the government led by socialist President Luis Arce, which was more critical of Europe, ensured that the project died a quiet death and that Germany in Bolivia had to take a back seat.
A few days ago, on the other hand, the Chinese consortium CBC succeeded in concluding a contract in the Andean nation. An investment of one billion US dollars, at least according to the announcement, should now lead to the construction of two lithium carbonate plants, announced the responsible Bolivian minister Franklin Molina a few days ago. This is reportedly the first international participation in the project in the country with the world's largest lithium deposits.
A truck transports magnesium chloride from the lithium mine of the Chilean company SQM (Sociedad Quimica Minera) in the Atacama Desert in Chile< /p>
Better chances in Argentina and Chile
Two German companies have a foot in the door in Argentina and Chile. The comparatively young company Deutsche E-Metalle (DEM) is one of them and plans to “become one of the world's leading specialists in the fields of e-materials and e-mobility, which are part of the currently emerging super cycle of electric mobility”. , it says on the company's website. This should be made possible, among other things, by indirect access to a large portfolio of licenses (over 70,000 hectares) located in the Lithium Triangle in Argentina.
Here, too, China is a big player: The Chinese company Ganfeng recently acquired the Argentine company Lithea, which owns the licenses for two lithium salt lakes, for 962 million US dollars. Tibet Summit Resources – also from China – wants to invest two billion euros in lithium exploration projects in Argentina.
A sign against the exploitation of lithium in the Salinas Grandes salt works shared by Argentina's northern provinces of Salta and Jujuy, near the Kolla indigenous community of Santuario de Tres Pozos.
German opportunities in Chile
The situation in Chile is a bit more difficult than in Argentina. Here it is unclear which regulatory framework a new constitution will grant to foreign companies, which is still to be politically negotiated. A company from Thuringia (Liverde) signed a cooperation agreement with Chilean partners in the Salar de Maricunga in October 2022 and is in the starting blocks. China is also very active in Chile. Beijing recently secured a 24 percent stake in Chilean company SQM, currently one of the world's largest lithium producers. There are also additional licenses for other Chinese companies.
A breakthrough could be achieved in the medium term, especially in Chile, because the sustainable thinking of the Chilean government is entirely in line with the German approach. People close to Chilean President Gabriel Boric have said that his government, which would like to retain the greatest possible state control over lithium production and its value chain, is open to German cooperation.
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Lithium: South America's “White Gold”
White treasure under a blue sky
The gigantic lithium extraction pools shimmer blue-green and form a sharp contrast to the dazzling white of the seemingly endless salt flats in the Chilean Atacama Desert. Lithium is an important component of batteries, for example in smartphones and laptops. Nowhere in the world are there larger deposits of the raw material than here in the salars and salt marshes of South America.
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Lithium: South America's “White Gold”
salt for the energy transition
An excavator loads lithium-containing salt onto a truck in the Salinas Grandes in Argentina's Jujuy province. Lithium is the raw material par excellence for the energy transition: it is needed in particular for the batteries of electric cars. And with the world community looking for alternatives to fossil fuels, demand for the “white gold” has skyrocketed.
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Lithium: South America's “white gold”
Salty spectacle of nature
The metal-rich salt water is pumped from underground lakes to the surface where it evaporates – like here in a basin in the Atacama Desert in Chile. What remains is brine, which is further processed in several stages. The finished lithium is exported, mainly to China. The raw material is currently processed almost exclusively in the People's Republic.
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Lithium: South America's “white gold”
First evaporate, then sell
The evaporation basins in Argentina's Salinas Grandes are lined up like strings of pearls. The lithium extracted in this way is a financial goldmine: the global average price rose from US$5,700 per tonne in November 2020 to US$60,500 in September this year.
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Lithium: South America's “White Gold”
Lonely Red-Bellied Thrush
Communities in the South American lithium triangle are hoping to benefit from the resource boom. But so far, most residents continue to live in poverty. However, the environmental problems are increasing: Mining pollutes the groundwater and produces toxic fine dust. This little red-bellied thrush in the Uyuni salt flats in Bolivia seems to be doing just fine.
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Lithium: South America's “white gold”
Cacti brave the harsh climate
Millions of liters of water are needed every day to mine lithium. The salt deserts of Argentina are located in the high mountains at almost 4000 meters. The air is low in oxygen, it is mostly cool and dry. The meter-high cacti are among the few plants that can withstand the biting wind and the inhospitable climate.
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Lithium: South America's “White Gold”
mining leads to lack of water
Close-up of an evaporation pond made by the Chilean company Sociedad Quimica Minera (SQM) in the Atacama Desert. According to its own statements, SQM will use almost 40,000 liters of water per hour to mine lithium in 2022. As early as 2013 it was found that a third of the carob trees in the mining area had died, probably due to lack of water.
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Lithium: South America's “White Gold”
“No to lithium, yes to life!”
In some communities in the “lithium triangle” between Argentina, Bolivia and Chile, protests are stirring: These visitors to Argentina's Salinas Grandes are greeted with a sign that reads “No to lithium, yes to water and life”. The local indigenous Kolla community managed to evict two mining companies from the salt marshes in 2019.
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Lithium: South America's “White Gold”
Moonscape in the Andes
A military checkpoint in the Salar de Uyuni, the world's largest salt pan in Bolivia. The almost 11,000 square kilometer landscape is characterized by salt, rock formations and cacti-covered islands. In 2008 ex-president Evo Morales nationalized the lithium industry and promised Bolivia to become a player on the world market. But nothing came of it: the government invested too little.
Lithium: South America's “White Gold”
A Scoop of “White Gold”
A worker scoops raw material for lithium production in Bolivia's Uyuni. Bolivia, Argentina and Chile plan to increase processing and manufacture batteries locally instead of exporting the raw material. Latin America wants to achieve economic advancement based on the example of China through high-quality industrial production.
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Lithium: South America's “White Gold”
Magnet for tourists
That wouldn't help much for the environment – but experts are considering how lithium can be mined in a more environmentally friendly way or recycled. Because then tourists like these in the Uyuni could simply continue to enjoy the beauty of the salt lakes.