Lithium and Clean Energy in Argentina: Development or Mirage?

"No to lithium" reads a sign erected in Salinas Grandes by local indigenous communities, who depend on the salt flats for tourism and to harvest salt, in the northwest of Argentina. In February 2019 they blocked the nearest highway, which runs to Chile, for nearly two weeks, halting exploration for lithium by a mining company. Credit: Daniel Gutman/IPS

“No to lithium” reads a sign erected in Salinas Grandes by local
indigenous communities, who depend on the salt flats for tourism
and to harvest salt, in the northwest of Argentina. In February
2019 they blocked the nearest highway, which runs to Chile, for
nearly two weeks, halting exploration for lithium by a mining
company. Credit: Daniel Gutman/IPS

By Daniel Gutman
OLAROZ, Argentina , Dec 18 2019 (IPS)

The intense white brightness of the salt flats interrupts the
arid monotony of the Puna in northwest Argentina, resembling
postcards from the moon. Beneath its surface are concealed the
world’s largest reserves of lithium, the key mineral in the
transition to clean energy, the mining of which has triggered
controversy.

The debate is not only about the environmental impact but also
about how real are the benefits for the local communities of this
region located more than 4,000 metres above sea level, where people
unaccustomed to the Andes highlands have a hard time breathing.

“I have no doubt that our province is destined to play a key
role in the coming years, which will be marked by the abandonment
of fossil fuels,” Carlos Oehler, president of the Jujuy Energy
and Mining State Society (Jemse), told IPS.

“It’s an opportunity for development. And the people who
only emphasise the environmental impact do so out of ignorance,”
he argued, at the company’s headquarters in Salvador, the capital
of the province of Jujuy.

Jemse, which is owned by the province – bordering Bolivia and
Chile – has been producing lithium since 2014 in the Olaroz salt
flats, through Sales de Jujuy, a public-private partnership with
Australia’s Orocobre and Japan’s Toyota Tsusho.

The participation of Toyota Tsusho – part
of the Toyota conglomerate – is a reflection of the international
interest in lithium for the production of batteries for electric
vehicles, a market expected to boom in the coming years in
industrialised countries.

The impact of lithium mining in the Puna region of Jujuy is
limited for now and differs depending on the area, IPS saw
first-hand during a several-day tour through the scattered towns
and villages of this rugged Andes plateau region.

Several of these communities, mostly populated by indigenous
Kolla people, became
Solar Villages
this year – a provincial project that
harnesses the abundant sunlight of the Puna region to bring
electricity to remote villages.

A few km from the Salar de Olaroz salt flats is the village of
the same name, made up of a few dozen adobe houses and reached by a
desolate dirt road.

A street in Olaroz, the village near the salt flats of the same name in the northwest Argentine province of Jujuy, where lithium mining provides stable work for some of the local inhabitants, in an area where communities have traditionally raised llamas and sheep for a living. Credit: Daniel Gutman/IPS

A street in Olaroz, the village near the salt flats of the same
name in the northwest Argentine province of Jujuy, where lithium
mining provides stable work for some of the local inhabitants, in
an area where communities have traditionally raised llamas and
sheep for a living. Credit: Daniel Gutman/IPS

A few “pros”…

Last year, the town’s first secondary school opened its doors.
It is a vocational-technical institution with an orientation in
chemistry, which aims precisely to train young people about
lithium.

In addition, lithium has brought stable jobs to a poor region,
where a majority of the population depends on llama and sheep
farming. Mirta Irades, principal of the Olaroz primary school, told
IPS: “Everyone here wants to work at the mining company, even if
it’s just washing the dishes.”

The real benefits, however, are modest. According to a report
presented by the national and provincial governments in November,
only 162 people, or 42 percent of those working in the Sales de
Jujuy company, come from local communities.

In total, the document says, direct mining employment in Jujuy
increased from 1,287 jobs in 2006 to 2,244 in 2018, with lithium
mining accounting for three-quarters of the growth. That is just
3.5 percent of registered employment in the province, although
wages are more than double the overall average.

The timeframes involved in lithium production are another
hurdle.

Sales de Jujuy is the only company in the province that is
commercially mining lithium. There are dozens of other companies
working, but exploration, pilot tests, the installation of
processing plants and other previous tasks can take up to 10
years.

Two men from indigenous communities near Salinas Grandes pick up bags of salt harvested by members of the local cooperative. Villages around Salinas Grandes have blocked attempts to mine lithium in the area. Credit: Daniel Gutman/IPS

Two men from indigenous communities near Salinas Grandes pick up
bags of salt harvested by members of the local cooperative.
Villages around Salinas Grandes have blocked attempts to mine
lithium in the area. Credit: Daniel Gutman/IPS

There is only one other company already mining lithium in the
entire northwest of Argentina, which is also made up of the
provinces of Salta and Catamarca.

This is the area that, along with northern Chile and southern
Bolivia, comprises the so-called Lithium Triangle, which
concentrates 67 percent of the world’s proven reserves of the
mineral, with Argentina at the head, according to data from the
U.S. Geological Survey.

…and several “cons”

But those who are skeptical about lithium’s potential for the
region point out that South American countries are once again
falling into the role of mere producers of primary products, as in
the case of agricultural and livestock exports.

This is crudely reflected in Olaroz, one of the Solar Villages
that is supplied with electricity by a small local solar park,
which like the others in the programme runs 24 hours a day thanks
to lithium batteries.

But the batteries are imported from China, since neither
Argentina nor the rest of South America has the technology to
manufacture them.

When you walk through communities in Jujuy’s Puna region,
there are places where people don’t even want to hear lithium
mentioned.

In Salinas Grandes, another giant white sea of salt, located
about 100 km from Olaroz, no mining company has been able to gain a
foothold due to opposition from the 33 indigenous communities in
the area.

Two indigenous women wait for customers at a craft stand in Salinas Grandes, in the Puna highlands region in northwestern Argentina. The tourist routes through the immense salt flats that break up the arid landscape here are an alternative created by the local indigenous communities to boost their income. Credit: Daniel Gutman/IPS

Two indigenous women wait for customers at a craft stand in
Salinas Grandes, in the Puna highlands region in northwestern
Argentina. The tourist routes through the immense salt flats that
break up the arid landscape here are an alternative created by the
local indigenous communities to boost their income. Credit: Daniel
Gutman/IPS

“This is our territory, we decided that lithium will not be
mined here, and they are going to have to respect us,” Verónica
Chávez told IPS, while participating in an assembly of some 100
members of indigenous communities in the middle of the salt
flats.

Chávez lives in the village of Santuario Tres Pozos, home to
some 30 families, and she is a member of the local cooperative that
brings together indigenous families who work harvesting salt, using
the same techniques their ancestors used for centuries.

“All the promises they make to us with the arrival of the
lithium companies are lies. Lithium is food for today and hunger
for tomorrow,” adds Chávez.

Local alternatives

Four years ago the communities in Salinas Grandes embarked on
another activity: guided tours and the sale of handicrafts to
Argentine and foreign tourists attracted by the seemingly endless
white landscape that glitters in the sunlight.

Alicia Chalabe, a lawyer for the indigenous populations of
Salinas Grandes, says no economic offer will manage to modify the
situation. “The communities live close to the salt flats and use
the territory, which for them has a very important historical,
cultural and patrimonial value,” she told IPS.

“In the Olaroz area, the situation is different because the
communities never used the salt flats,” she adds.

 A sign marks the entrance to Sales de Jujuy, one of the only two companies that mines and sells lithium in Argentina, the country with the largest proven reserves. It operates in the Olaroz salt flats and is made up of the Australian company Orocobre, Japan's Toyota and a public enterprise from the province of Jujuy, in the northwest of Argentina. Credit Daniel Gutman/IPS

A sign marks the entrance to Sales de Jujuy, one of the only two
companies that mines and sells lithium in Argentina, the country
with the largest proven reserves. It operates in the Olaroz salt
flats and is made up of the Australian company Orocobre, Japan’s
Toyota and a public enterprise from the province of Jujuy, in the
northwest of Argentina. Credit Daniel Gutman/IPS

In February, the communities of Salinas Grandes staged a nearly
two-week roadblock on national highway 52, which connects Argentina
with Chile, successfully bringing to a halt the exploration work
that a lithium mining company had begun in the area without the
approval of the local indigenous population.

The resistance in Salinas Grandes is based in part on studies by
Marcelo Sticco, a hydrogeologist at the University of Buenos Aires
(UBA), who points out that lithium extraction puts community water
sources at risk in a desert area where rain is a very sporadic
luxury.

“The studies we carried out are conclusive,” Sticco told IPS
from the Argentine capital. “Lithium is separated through the
evaporation of enormous quantities of water, which fuels the
salinisation of the groundwater used for consumption in the
region.”

The government of Jujuy has a project to add value to lithium in
the province: it partnered with the Italian electronics group SERI,
which could locally install a battery assembly plant, with the aim
of moving towards electric urban public transport.

This initiative, if implemented, could modify a scenario that
for now does not offer significant concrete benefits, even though
many in Argentina are already counting on the wealth that the
so-called “white gold” will bring.

But although Argentina’s lithium exports have been growing,
they reached just 251 million dollars in 2018, a mere 6.5 percent
of the country’s mining exports.

However, Oehler, the president of Jemse, believes that the peak
in international demand for lithium has not yet arrived: “It will
peak between 2025 and 2030 and we have to take advantage of it to
grow and to improve the lives of our communities,” he said.

But some experts fear the consequences of staking too much on
this mineral, which could soon be outdated by a new technology that
reduces or eliminates its current attraction.

Lithium has many uses, but it is most coveted as a heat
conductor in rechargeable batteries.

These are used in cell phones, in the storage of different
renewable energies, especially solar power, and in electric
vehicles, the use of which is projected to steadily increase,
especially in public transport, as they push aside fossil-fuel
vehicles as part of the effort to curb global warming.

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Lithium and Clean Energy in Argentina: Development or Mirage?

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Lithium and Clean Energy in Argentina: Development or Mirage?