Bolivia, Afghanistan and Lithium
28 June 2010
Ever since the New York Times published its report on the “discovery” of huge lithium reserves in Afghanistan two weeks ago, everyone from energy analysts to conspiracy buffs have all been atwitter (and a Twitter as well). The Times described an internal Pentagon memo that estimated that the embattled nation partially occupied by US troops might be sitting on nearly $1 trillion in untapped mineral deposits, including the light metal that is at the heart of plans to develop batteries for electric cars. The Times quoted unnamed US officials who offered that the discovery could, “alter the Afghan economy and perhaps the Afghan war itself.”
It was a story that got echoed for days among journalists who just dipped into it deep enough to cash in on a bit of its temporary star quality. Did this mean that a nation that has been rendered a basket case for three decades, through a mix of Soviet, Taliban, and U.S. contributions, might actually have a future as a rich nation? Was this evidence of the “real reason” for ongoing and escalating U.S. involvement in the longest war in the nation’s history? Was this all part of some clever U.S. plot to marginalize Bolivia’s vast lithium deposits (the undisputed largest in the world until now) because they are controlled by a fierce U.S. critic?
For those following lithium developments closely it was this choice quote from the leaked Pentagon report that most raised eyebrows – that Afghanistan was positioned to potentially become the “Saudi Arabia of lithium.” It was precisely the same quote used in a recent New Yorker magazine piece on Bolivia’s lithium, to describe Bolivia’s potential position – a piece of quotable rhetorical flourish invented by a French carmaker courting President Evo Morales last year. Was this a secret signal to Morales that he was going to have his lithium dreams stolen from him, or did a Pentagon writer just read the snippet and borrow it for style?
After a few days, the media’s attention turned rightly back to the present oil disaster in the Gulf of Mexico and the present crisis on the Afghanistan battlefield, and those who actually know something about lithium went to work on the story. And what was the upshot? Don’t look for Afghanistan to become Saudi Arabia anytime soon, and especially on the wings of lithium.
The solid technology Blog produced by Popular Science quoted a Canadian mining analyst who captured the real essence of the story this way, “I am not going to be the one leading a team into Taliban territory to try and process lithium.”
In May the Democracy Center published our own substantive report on lithium in Bolivia – you can read it for free here and see excerpts from some of our interviews.
As we reported, on the one hand having large supplies of lithium is potentially a big deal. Carmakers are rushing toward a new market in electric cars and for now the technology of choice for the batteries that will run those cars is lithium. Some industry analysts predict that the demand for lithium batteries could leap over the course of a decade or two from $100 million per year to $100 billion. That is the difference between drinking one beer versus a thousand – quite a leap.
But as we also reported, the gap between having a mountain of lithium buried under your soil versus having the money in your pocket is formidable. First, the long-term demand and market for lithium is still full of unknowns. Maybe there will be an explosion of demand for electric cars and maybe not. Maybe lithium will end up being the main technology used for those batteries or maybe it will eventually end up being something else. In the 21st century betting on the long-term staying power of any technology is a very uncertain bet. Does anyone reading this wish they had invested in thirty-year futures on the floppy disk?
All this uncertainty is particularly a problem when you consider the huge investments in infrastructure required to mine and transform lithium into sellable products, especially precise and sensitive batteries. We’re talking roads, electricity, water and more. In Bolivia, government officials have projected those costs to be as much as $1 billion. That is one big bet to make with so much uncertainty involved, especially when countries such as Chile and Argentina already have that infrastructure built and still have a great deal of untapped lithium left underfoot.
Add decades of war with no end in sight to the mix, and you have your answer to the question about how fast Afghanistan is going to become Saudi Arabia.
Finally, there is the question that Times and the Pentagon didn’t seem to have much interest in. Does mineral wealth under the ground really make the people who live on top of it better off? There are probably a few people in the Gulf of Mexico asking themselves that question right now and it is a valid one anytime that corporations and soldiers start to look starry-eyed at some new buried treasure. The Resource Curse is real and is it the subject of the brief video commentary above that I recorded for GRIT-TV in New York earlier this month. Have a look (note: the clip has a very brief promo for GRIT-TV at the start).
15 responses to Bolivia, Afghanistan and Lithium
The countries with the most (potential) natural resources in the world are the poorest and most corrupt (Afghanistan, Congo, Bolivia, etc).
What can be more corrupt than invading two countries(Irak and Afganistan) under the pretex of terrorism…
and commiting genocide…
Believing that?
It is a matter of facts not beliefs…
What are you talking about?
reseach 9|11
No doubt, Bolivia is a poor country and now a day, VERY CORRUPT, under a “socialist” flag they are selling the country to the ones who are offering them totalitarian power and control. It is sad to see a peaceful country going down.
“Was this a secret signal to Morales that he was going to have his lithium dreams stolen from him, or did a Pentagon writer just read the snippet and borrow it for style?” This is funny, Jim. You seem to be in a Bolivia bubble and in need of perspective: the Pentagon doesn’t really think about Bolivia (ok, maybe a couple of people, for part of their time) and the Saudi Arabia analogy is a pretty straight forward one, not that brilliant or unique. Plus, according to most analysts, Bolivia is still years away from even begining to produce for market (if they ever get there) while currently producing nations have tremendous potential to continue expanding. Technology is improving so that batteries need increasingly less lithium, and other technologies are sure to emerge as well. By the time Bolivia catches up (if they ever do), it will be too late. It’s too bad. Afghanistan may have potential, but they’re a mess too. That I can recall, resources alone have never led to development.
It’s sad how the so-called first “indigenous” president of the Western hemisphere oppresses the people he supposedly represents, the Bolivian indians.
The confederation of indians from the Amazon basin, CIDOB, is marching complaining that the champion of Pachamama rights Morales is allowing the exploitation of natural resources and the construction of a major highway through their land, which is a pristine environmental treasure, without even consulting them. They don’t want their land to become coca ruined like Chapare.
Result? Morales insults his brother indians as “traitors” and pawns of USAID. Copying the sentiment of their president of the coca union Morales, the racist cocaleros have warned the indians not to “make them mad”. Not even the worse military dictators would warn such a thing.
“First indigenous” – Benito Juarez was a Zapotec.
In pursuing political hegemony at all costs, even in this new devolved state with local/regional/indigenous autonomies, Evo and MAS are potentially repeating past mistakes from Bolivian history. While nobody disputes the sincerity of wanting to bring real change, it will count for nowt if you surround yourself with less than sincere people. When you alienate your own political base, they will find even more radical alternatives either side, and the result is an ungodly mess.
Morons…. especially the idiot at 5:13 pm june 28th…
how to argue with a patriotic person that has the intellect of a peanut…
Yes the Bolivian Goverment is full of Morons…
yes, the Bolivian Government are full of Morons…(idiot).
People in every country get the loans from various creditors, just because this is simple.