Is Elon Musk coveting Bolivia’s lithium resources? Not really …

. Aug 02, 2020
Is Elon Musk coveting Bolivia's lithium resources? Not really … Photo: Dennizn/Shutterstock

“We will coup whoever we want! Deal with it.” This was the Twitter response of Elon Musk, CEO of electric vehicle giant Tesla, when questioned about the alleged U.S. interference in the military coup of Bolivian President Evo Morales in 2019. The accusation — hardly debunked by Mr. Musk’s reaction — was that Tesla waded into the internal affairs of the Andean nation to gain access to Bolivia’s lithium resources — the world’s largest, reportedly making up between 50 and 70 percent of the world’s deposits. 

The conspiracy theory is not terribly complex. First, Tesla’s electric cars are run by lithium battery cells; second, Evo Morales, known for defending Bolivian sovereignty over natural resources, said in an interview to a Brazilian outlet in April that “the coup was against the indigenous and [it was] for lithium.” And suggesting that a coup in Latin America included U.S. involvement is not a stretch by any means.

</p> <p>Nicknamed &#8216;white oil,&#8217; the lithium market is growing at an annual rate of 18.7 percent. As reported by Allied Market Research, it was worth USD 36.7 billion in 2019 and is tipped to reach USD 129.3 billion by 2027.</p> <p>And Tesla has had a hand in that.&nbsp;</p> <p>Valued at USD 34 billion in 2020, the company uses at least 28,000 tons of lithium hydroxide a year, according to Bloomberg. However, Bolivia&#8217;s Uyuni Salt Flat — the largest lithium deposit in the world — are not primary resource suppliers for Tesla, leaving that post to Ganfeng Lithium (China), Kidman Resources (Australia), and Pure Energy Minerals (Canada).&nbsp;</p> <div class="flourish-embed flourish-chart" data-src="visualisation/3362335" data-url=""><script src=""></script></div> <p>Another component of this wild theory involving Mr. Musk and the <a href="">endless crisis in La Paz</a> are recent contracts between Bolivian state-owned lithium firm Yacimientos de Litio Bolivianos (YLB) and Chinese companies, suggesting that Bolivia would prefer looking east to strike up lithium deals, as opposed to U.S. firms.&nbsp;</p> <p>The overbearing question is whether Elon Musk gains anything from overthrowing a Latin American president in search of lithium. According to Emily Hersh, mining and energy expert and the host of the Lithium Podcast, the answer is no.&nbsp;</p> <p>“The coup in 2019 was not about lithium. Being the biggest ore resource doesn’t mean it is the best. Extracting lithium in Bolivia requires an expensive process involving chemistry and energy. And the landscapes in the country don’t help with the logistics,” Ms. Hersh told <strong>The Brazilian Report</strong>.&nbsp;</p> <p>The perspective of lithium as the commodity of the future is also one of the reasons why politicians like Evo Morales have always <a href="">put it on a pedestal as a game changer</a>. In 2006, when he was first elected, Bolivia nationalized the production of oil and gas, generated USD 31.5 billion profit over the decade and strengthened the image of the country being “independent” of foreign interests.</p> <p>But this might not apply to lithium. Ms. Hersh explains that besides similar backgrounds — a developing country defending its sovereignty over a natural resource — lithium won&#8217;t be to Bolivia what oil has been to <a href="">Venezuela</a>, where the commodity makes up over 90 percent of exports.</p> <p>“The world doesn’t really need Bolivian lithium that much,&#8221; says Ms. Hersh. &#8220;Many politicians talk about lithium because they know it will put them on the front page of the newspapers. But nobody puts their hands in it and gets it done. Without the proper investment and science (and, basically money), you won’t turn that feedstock into batteries anytime soon.”&nbsp;</p> <figure class="wp-block-image size-large"><img loading="lazy" width="1000" height="665" src="" alt="Bolivia's Uyuni Salt Flat — the largest lithium deposit in the world" class="wp-image-45535" srcset=" 1000w, 300w, 768w, 610w" sizes="(max-width: 1000px) 100vw, 1000px" /><figcaption>Bolivia&#8217;s Uyuni Salt Flat — the largest lithium deposit in the world. Photo: Ksenia Ragozina/Shutterstock</figcaption></figure> <h2>Things will change, but not much&nbsp;</h2> <p>After the coup against Mr. Morales and his Movement to Socialism (MAS) party, the previously unknown Jeanine Áñez swore herself in as <a href="">interim president and a conservative shift</a> began in the country after 13 years of left-wing administrations. Soon, Ms. Áñez started re-establishing relations with the U.S., starting with the appointment of Wálter Oscar Serrate as Bolivia’s first ambassador in Washington since 2008.</p> <p>While Mr. Serrate was sending a letter condemning the support of Democratic Senators in the U.S. for Evo Morales and calling the former president a “terrorist,” many saw this new relationship as an opportunity for Bolivia and the U.S. to talk business — and lithium may well come up in conversation.</p> <p>However, Juan Carlos Zuleta, the new head of YLB appointed after the coup, explained that the state-owned company “would apply strict limits to foreign investment” regarding Bolivian lithium. In other words, as Mr. Morales always said, Bolivia&#8217;s white oil will remain Bolivian.

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Lucas Berti

Lucas Berti covers international affairs — specialized in Latin American politics and markets. He has been published by Opera Mundi, Revista VIP, and The Intercept Brasil, among others.

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