Protesting Germany's Securing of Resources in Bolivia

BERLIN/LA PAZ | | bolivien

BERLIN/LA PAZ (Own report) - Massive protests have erupted in Bolivia against a German-affiliated lithium mining joint venture for use in E-car batteries. The consortium, in which the German ACI medium-sized enterprise is participating, is being accused of illegally withholding from the communities surrounding the sites of the lithium deposits in Bolivia's highlands, their share of the export returns. Doubts are growing about whether the joint venture ("YLB ACISA E.M.") will actually construct a complete lithium value chain, all the way to the finished car battery, in Bolivia, as President Evo Morales' government had originally demanded. The German project partners' claims to patent rights and the control of the financial flow are nurturing additional suspicion toward the medium-size enterprise from Baden Wurttemberg. The company had been given massive support at the federal level, to prevail in the competition against consortiums from China, Russia and the USA.

Street Barricades and Hunger Strikes

A German-Bolivian lithium mining project is meeting resistance. Large demonstrations and street blockades have erupted in Bolivia's high plateau city, Potosi, in the vicinity of the Uyuni Salt Lake, which holds one of the world's largest lithium deposits. Some activists have even gone on a hunger strike. "Today, Potosi has again taken to the streets to fight for the natural resources of our state and our country," Marco Pumari, of the Citizens Committee of Potosi (Comcipo) recently explained.[1] The protestors are calling on Bolivia's President, Evo Morales, to annul the joint venture contract between the state-owned Bolivian Lithium Deposits, YLB ("Yacimientos de Litio Bolivianos") and the German company ACISA ("ACI Systems Alemania"), a subsidiary of the ACI company in Rottweil (Baden Wurttemberg). In the run-up to Sunday's elections, quite a few protesters are using the demonstrations to express their general dissatisfaction with the socialist government. The demonstrators are concretely protesting the fact that the YLB ACISA E.M. consortium is refusing to turn over 3 percent of the export returns to the surrounding communities - as stipulated in Art. 2.27 of the Mining Law. The joint venture - with 51 percent YLB shares to ACISA's 49 percent - seeks to render far less to the communities. YLB ACISA argues that lithium is no longer a raw material, but rather a processed product, which means that Art. 2.27 does not apply. Besides, Germany's ACISA mother company only sees this to be a question for its South American subsidiary: "We do not know to which extent the Bolivian government wants to share the profits with the population. ACISA also does not have any influence."[2]

China Loses Out

During the April 2018 bidding, the medium-size enterprise from Baden Wurttemberg prevailed against consortiums from China, Russia, the USA, and other contries, for the franchise to mine the natural resource mainly used in the production of E-car batteries. "The Chinese were completely taken aback," said a company representative. "Had they secured the deal, they would have controlled 75 percent of the lithium world market."[3] Now, however, via ACISA, Germany's ACI has long-term access to the raw material known as "white gold." The contract's duration is 70 years.

Concerted Action

The German government had massively supported the project. The German embassy in Bolivia, Germany's Ministry of the Economy and its Ministry of Foreign Affairs all promoted ACISA. The state governments of Baden Wurttemberg and Thuringia both were also very active. Germany's Minister of the Economy, Peter Altmaier, personally called President Morales on this question. "We urgently need lithium in Europe to make progress in our electro mobility," said Wolfgang Tiefensee, Thuringia's Minister of the Economy, when he visited La Paz last year to sign the letter of intent between ACI and YLB.[4] The contract's actual conclusion took place in Berlin in mid-December 2018. The celebrations were held in Baden Wurttemberg's federal offices in the German capital, also with the participation of Germany's Minister of the Economy, Altmaier, Bolivia's Minister of Foreign Affairs, Diego Pary, Bolivia's Minister of Energy, Rafael Alarcón. ACI, according to its own account, was supported by a "network of internal and external experts, enterprises and institutions, such as K-UTEC Salt Technologies, Fraunhofer Society and German Engineering Federation (VDMA)."[5]

An Opportunity for Bolivia?

"Germany is insuring for itself access to the world's largest reserves," boasted Germany's business press upon completion of the deal.[6] The Agency for German Resources (DERA) praised "the lithium oligopoly could have competition."[7] DERA also claimed to see "an opportunity for Bolivia," since the joint venture plans - at least officially - not merely to limit itself to mining raw materials, but plans, in fact, to construct an entire value chain in that Andean nation. According to ACISA, this will range "from the raw material lithium hydroxide to cathode material and all the way to battery systems production plants."[8]

"Again Merely a Raw Materials Supplier"

Thus, ACISA meets President Morales' government's demands, of not only mining, but also maintaining the lucrative processing of the raw materials within the country, applying thereby the lessons of his conservative predecessors' policies of ruthlessly squandering the country's riches. However, the repeatedly promised construction of an appreciable raw materials processing plant is making little practical headway, in spite of reiterated verbal assurances. ACISA is currently concentrating its efforts mainly on the construction of a plant for mining lithium hydroxide. "Once our plant is built and running, the next step will be taken," assuaged an employee of the company and announced, "We will also build a small battery plant, in other words, beginning with small proportions."[9] However, this is also doubted. "It seems to me that we have made too many concessions to reach what we have all been dreaming of - a battery plant and a sales market," assesses Héctor Córdova, the former President of the government owned COMIBOL Mining Company.[10] Oscar Campanini of the Bolivian NGO CEDIB also warned,. "We are afraid that we again will be considered merely a raw materials supplier." Whereas the mining of the raw materials continues to increase in practice, the battery plant project in Bolivia remains merely a promise.[11]

Under German Control

There are also numerous other doubts about this project. Some generally consider it to have been wrong to grant the contract to German companies, because Germany is - at least until now - not among the forerunner sites in the battery technology sector. Others have little confidence that particularly a medium-size enterprise, such as ACI, with merely 50 employees, limited capital backing, and negligible lithium experience, will be able to see through this exceedingly important project in Bolivia. The company's business practices are also a source of criticism. For example, in spite of its minority YLB ACISA joint venture shares, ACI's Bolivian subsidiary has acquired the patent and utility model rights, and is otherwise seeking decisive influence. Although the Bolivian government owned YLB holds 51 percent of the joint venture shares, an employee explains, "our consent is always needed for the very important decisions. We arranged it that way, because we are providing the market, the technology and naturally the innovations. ... That means, we control the flow of finances, the finances and the technology. That has been clearly laid out."[12]

 

[1], [2] Rosa Muñoz Lima: Deutsches Interesse an weißem Gold stößt auf Widerstand. dw.com 08.10.2019.

[3] Karl-Ludolf Hübener: Lithium - die Jagd nach dem "weißen" Gold in Bolivien. wdr.de 25.08.2019.

[4] Carl Moses: Deutsche Unternehmen fördern Lithium in Bolivien. Frankfurter Allgemeine Zeitung 09.10.2018.

[5] Rosa Muñoz Lima: Deutsches Interesse an weißem Gold stößt auf Widerstand. dw.com 08.10.2019.

[6] Deutschland sichert sich Zugriff auf weltgrößte Reserven. manager-magazin.de 13.12.2018.

[7] Heike Holdinghausen: Das neue Öl ist weiß. taz.de 13.12.2018.

[8] Nachhaltige und faire Lithiumgewinnung in Bolivien. acisa.de.

[9], [10] Karl-Ludolf Hübener: Lithium - die Jagd nach dem "weißen" Gold in Bolivien. wdr.de 25.08.2019.

[11] Heike Holdinghausen: Peter Altmaier macht Milliarde locker. taz.de 21.02.2019.

[12] Karl-Ludolf Hübener: Lithium - die Jagd nach dem "weißen" Gold in Bolivien. wdr.de 25.08.2019.