SALAR DE ATACAMA, Chile—Hailed as the Saudi Arabia of lithium, this 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.
Here in Chile, where lithium is already tightly controlled, President Gabriel Boric’s new leftist government plans to create a state lithium company after criticizing past privatizations of raw commodities as a mistake. A new constitution, if approved in a September referendum, would strengthen environmental rules and indigenous rights over mining. Rest of story at link below…