Bolivia's Lithium Dilemma:
An ESG Approach to the Challenges in the Salt Flats
Lithium has seen a 36.8% production increase from 2018 to 2022, driven by the demand for Lithium-ion batteries (LIBs) essential in Electric Vehicles (EVs) and renewable energy storage (USGS, 2023; USGS, 2018).
Below is a summary of research from my team at Georgetown University’s Masters in Environmental Sustainability Management. Our research focuses on scaling mining in Bolivia's Salar de Uyuni using an ESG framework. We propose comprehensive solutions for both public and private sectors to implement if mining expands in the region.
Summary of Bolivia's Lithium Dilemma
This report addresses Bolivia's unique position within the Lithium Triangle, possessing up to 40% of the region's lithium reserves, yet it faces significant production challenges compared to its neighbors, Argentina and Chile. It examines Bolivia's current practices in lithium extraction and the associated environmental, social, and governance (ESG) challenges, alongside offering actionable solutions.
Environmental and Technological Challenges
Bolivia's reliance on lithium brine evaporation methods poses substantial environmental risks, such as water scarcity and biodiversity loss. The report suggests adopting Direct Lithium Extraction (DLE) technology to mitigate these effects, recommending a more circular approach to the lithium supply chain, including scaling up hydrometallurgical recycling of Electric Vehicle lithium-ion batteries.
Social and Economic Challenges
The balance between lithium extraction and tourism in the Salar de Uyuni region presents complex social and economic issues. The report advocates for a synergistic approach, integrating community consultation and infrastructure improvements to benefit both sectors.
Governance Challenges
Bolivia's governance structure, characterized by resource dependence, poses challenges for indigenous rights and equitable profit-sharing. The report recommends establishing a hybrid Public-Private Partnership model and improving the royalty structure based on transparent public consultations.
Recommendations and Solutions
Key recommendations include adopting DLE technology to minimize environmental impacts, promoting circularity in the lithium industry, enhancing social inclusion through community engagement and tourism integration, and improving governance through equitable profit-sharing and public consultations.
The report concludes by emphasizing the need for a comprehensive ESG-focused approach to address Bolivia's lithium extraction challenges. By implementing these recommendations, Bolivia can better harness its lithium resources while promoting sustainable practices and ensuring long-term economic, social, and environmental benefits.