Locals are challenging new contracts that force the country to absorb high levels of financial risk.
Bolivians say the new contract will bring zero benefits to local people.
However, the authorities initially did not make the contract public.
It raised a red flag for many Bolivians, especially those living in Potosi province.
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The agreement with China includes two new facilities and the expected production of 35,000 tonnes of lithium carbonate per year.
The Russian operation expects to produce 14,000 tonnes of minerals each year.
The report raised eyebrows and raised doubts among many locals who are used to Bolivian leftist government becoming more transparent about foreign investment transactions.
Some of the suspicious aspects of the Russian contract include a vague language about the transfer of ownership from the Uranium 1 group to Bolivia and the assumptions of the majority of YLB’s financial risk.
However, when details of China’s lithium contract surfaced last week, Bolivians quickly organized protests and called for action against YLB and President Louis Arce.
Workers will use shovels to show the raw materials for the production of lithium carbonate in the salt recovery pool of the Llipi pilot plant in Uyun Salt Flat, Bolivia on August 13, 2022. Gaston Brit Misokki/Getty Images
“Under this contract there is no profit for Bolivia,” Torres said, calling China’s lithium contract “the worst contract.”
The basis for abolishment
Torres explained that in the first phase, China has the right to use the land for 36 years, but has been granted in total for 42 years.
During this time, Bolivia is expected to provide all energy requirements, such as gas and electricity, at its own expense.
“Bolivia will also need to cover the additional costs of extraction and purification in Brinepool, so China will be offering its nearly finished product,” Torres said.
One of the poorest and poorest people in the country, Potosi Province, despite owning 100% of Uyuni Salt Flats, only sees 3% of its profits.
The other 48% of the profits in China’s trade belong to YLB, Torres said.
He added that operating costs alone raise questions as to why the government enters such a harmful agreement.
“The price to make all (lithium) is about $30,000 per ton. But do you guess what the price of lithium (per ton) these days? Only about $10,000. That’s not meaningful.”
According to Fastmarkets at Commodity Insights Group, the price of battery-grade lithium slump in 2024 due to the compounding effect of oversupply and slowing battery demand.
Torres said that if operating expenses exceed profits, Bolivia could be stuck paying “ghost money” to break YLB’s China contract.
He also believes new lithium deals with Hong Kong and Moscow could be the forefront of money laundering.
It is not the first time that members of the current administration have been caught up in a foreign money laundering scheme.
Torres, on the other hand, is far from the only person who asks why business is at a loss.
“At least it won’t surprise me. A Bolivian policy analyst who asked me to identify with Francisco told the Epoch Times.
Francisco is a business owner and works with the Santa Cruz Citizens Committee. He said he was tired of seeing “incompetent officials” waste their country’s valuable resources.
Due to a fuel shortage in La Paz on October 23, 2024, vehicles are lined up for refueling during the 24-hour transportation strike. Aizar Raldes/AFP via Getty Images
Francis said, “The MAS (The Movement for Socialism) inherited one of the world’s richest gas reserves in the early 2000s, but no one knew how to run it like a business. That was it.”
Bolivia has considerable natural gas reserves, and 22 years ago became a point of serious conflict between government officials and people.
ARCE is the current head of the MAS party previously led by former president Evo Morales when he came to power in 2006. In the same year, Morales nationalized the country’s natural gas reserves.
Francis said the YLB lithium contract is an example of a predictable pattern among Latin American left governments.
Torres said Bolivians are filing a lawsuit under Law 221 to violate China’s contract with Russia.
The same law also applies to individuals who sign contracts deemed harmful to the national economy, who may face up to eight years’ imprisonment.
In the case of the contested lithium agreement between China and Russia, Torres said Law 221 would also apply to those working in YLB, to secretaries or lawmakers who approve it, and to Bolivian presidents.
“People need to ask for the nullification of this contract in a legal way,” Torres said, adding that the contract is still awaiting approval from the Senate.
Smoke and mirror
More than 30 Bolivian agencies reportedly denounced some of the contracts that were “not clearly explained.”
At the same time, Potosi residents are not wasting time organizing protests.
But Francis says the public’s rage over the new lithium contract could be a smokescreen against something else.
This example happened during a storm of media in Morales fleeing Bolivia in 2019 over evidence of election fraud.
However, the investigation revealed that the central bank had departed for millions of dollars between November 7th and November 8th.
Currently, Arce is facing an election in August.
Francisco and Torres believe that the new lithium trade will be an ideal opportunity to pocket more money before potentially leaving.
