Bolivia’s lithium and the urgency of a coup

Indian historian Vijay Prashad writes about what could be behind the overthrowing
of Bolivian president Evo Morales
Vijay Prashad, Brasil de Fato November 12, 2019

People demonstrate in support of Evo Morales, holding a banner that reads 'It's not a resignation,
It's a coup', in Mexico City on Nov. 11 / Claudio Cruz/AFP

Bolivia’s President Evo Morales was overthrown in a military coup on November 10. He is now in
Mexico. Before he left office, Morales had been involved in a long project to bring economic and social
democracy to his long-exploited country. It is important to recall that Bolivia has suffered a series of
coups, often conducted by the military and the oligarchy on behalf of trans-national mining companies.
Initially, these were tin firms, but tin is no longer the main target in Bolivia. The main target is its massive
deposits of lithium, crucial for the electric car.

Over the past thirteen years, Morales has tried to build a different relationship between his country and its
resources. He has not wanted the resources to benefit the transnational mining firms, but to benefit his
own population. Part of that promise was met as Bolivia’s poverty rate has declined, and as Bolivia’s
population was able to improve its social indicators. Nationalization of resources combined with the use
of its income to fund social development has played a role. The attitude of the Morales government
towards the trans-national firms produced a harsh response from them, many of them taking Bolivia to
court.

Over the course of the past few years Bolivia has struggled to raise investment to develop the lithium
reserves in a way that brings the wealth back into the country for its people. Morales’ vice president
Álvaro García Linera had said that lithium would be the "fuel that feeds the world." Bolivia was unable to
make deals with Western trans-national firms; it decided to partner with Chinese firms. This made the
Morales government vulnerable. It had walked into the new Cold War between the West and China. The
coup against Morales cannot be understood without a glance at this clash.
Clash with the Trans-National Firms
When Evo Morales and the Movement Toward Socialism took power in 2006, the government immediately
sought to undo decades of theft by trans-national mining firms. Morales’ government seized several of the
mining operations of the most powerful firms, such as Glencore, Jindal Steel, Anglo-Argentinian Pan
American Energy, and South American Silver (now TriMetals Mining). It sent a message that business as
usual was not going to continue.

Nonetheless, these large firms continued their operations – based on older contracts – in some areas of the
country. For example, the Canadian transnational firm South American Silver had created a company in 2003
– before Morales came to power – to mine the Malku Khota for silver and indium (a rare earth metal used
in flat screen televisions). South American Silver then began to extend its reach into its concessions. The
land which it claimed was inhabited by indigenous Bolivians, who argued that the company was destroying
its sacred spaces as well as promoting an atmosphere of violence.

On 1 August 2012, the Morales government – by Supreme Decree no. 1308 – annulled the contract with
South American Silver (TriMetals Mining), which then sought international arbitration and compensation.
Canada’s government of Justin Trudeau – as part of a broader push on behalf of Canadian mining companies
in South America – put an immense amount of pressure on Bolivia. In August 2019, TriMetals struck a
deal with the Bolivian government for $25.8 million, about a tenth of what it had earlier demanded as
compensation.

Jindal Steel, an Indian transnational corporation, had an old contract to mine iron ore from Bolivia’s El
Mutun, a contract that was put on hold by the Morales government in 2007. In June 2012, Jindal Steel
terminated the contract, sought international arbitration, and compensation for its investment. In 2014, it
won $22.5 million from Paris-based International Chamber of Commerce. For another case, Jindal Steel
demanded $100 million in compensation.

The Morales government seized three facilities from the Swiss-based trans-national mining firm Glencore;
these included a tin and zinc mine as well as two smelters. The mine’s expropriation took place after
Glencore’s subsidiary clashed violently with miners.

Most aggressively, Pan American sued the Bolivian government for $1.5 billion for the expropriation of
its stake in Petrolera Chaco by the state energy company. Bolivia settled for $357 million in 2014.

The scale of these payouts is enormous. It was estimated in 2014 that the public and private payments made
for nationalization of these key sectors amounted to at least $1.9 billion (Bolivia’s GDP was at that time
$28 billion).

In 2014, even the Financial Times agreed that Morales’ strategy was not entirely inappropriate. "Proof of
the success of Morales’ economic model is that since coming to power he has tripled the size of the economy
while ramping up record foreign reserves."

Lithium
Bolivia’s key reserves are in lithium, which is essential for the electric car. Bolivia claims to have 70% of
the world’s lithium reserves, mostly in the Salar de Uyuni salt flats. The complexity of the mining and
processing has meant that Bolivia has not been able to develop the lithium industry on its own. It requires
capital and it requires expertise.
The salt flat is at 3,600 meters above sea level, and it receives high rainfall. This makes it difficult to use
sun-based evaporation. Such simpler solutions are available to Chile’s Atacama Desert and in Argentina’s
Hombre Muerto. More technical solutions are needed for Bolivia, which means that more investment is needed.
The nationalization policy of the Morales government and the geographical complexity of Salar de Uyuni
chased away several transnational mining firms. Eramet (France), FMC (United States) and Posco (South
Korea) could not make deals with Bolivia, so they now operate in Argentina.

Morales made it clear that any development of the lithium had to be done with Bolivia’s Comibol – its
national mining company – and Yacimentos de Litio Bolivianos (YLB) – its national lithium company –
as equal partners.

Last year, Germany’s ACI Systems agreed to a deal with Bolivia. After protests from residents in the Salar
de Uyuni region, Morales cancelled that deal on November 4, 2019.

Chinese firms – such as TBEA Group and China Machinery Engineering – made a deal with YLB. It was
being said that China’s Tianqui Lithium Group, which operates in Argentina, was going to make a deal with
YLB. Both Chinese investment and the Bolivian lithium company were experimenting with new ways to
both mine the lithium and to share the profits of the lithium. The idea that there might be a new social
compact for the lithium was unacceptable to the main trans-national mining companies.

Tesla and Pure Energy Minerals (Canada) both showed great interest in having a direct stake in Bolivian
lithium. But they could not make a deal that would take into consideration the parameters set by the Morales
government. Morales himself was a direct impediment to the take-over of the lithium fields by the non-
Chinese trans-national firms. He had to go.

After the coup, Tesla’s stock rose astronomically.

Edition: Aline Scátola

Evo Morales resigns after Bolivian army backs right-wing coup
Amid an atmosphere of violence and intimidation by the opposition,
vice president Alvaro Garcia Linera also resigned
Peoples Dispatch November 11, 2019

Bolivian president Evo Morales had earlier called for fresh elections / Handout/Government of Bolivia

Bolivian President Evo Morales resigned on Nov. 10, Sunday, after the army backed a right-wing opposition
coup against him. Earlier, Morales had called for fresh elections and dialogue amid the rising violence
and provocation of the opposition against his government and members of his party, the Movement
Towards Socialism (MAS). Vice president Alvaro Garcia Linera also resigned in the press conference.

In a press conference announcing his resignation, Morales said, “I hope that [Carlos] Mesa and [Fernando]
Camacho [right-wing opposition leaders] and the other civic committees do not mistreat, harm, do not
deceive, with lies, do not use the people. Our great wish is that social peace returns, that they know that
oligarchic groups conspire against democracy.”

Protests against Morales began the day after the general elections on Oct. 20. The final results showed
that he had obtained over 10% more votes than his closest rival, Carlos Mesa, which was necessary for
victory.

However, the opposition refused to accept the results and began violent mobilizations demanding his
resignation. Morales invited the Organization of American States (OAS) to conduct an audit despite the
organization’s impartiality being in doubt. The OAS’ preliminary report called for fresh elections. Following
this, Morales called for new general elections on Sunday. However, the opposition continued to violently
press for his resignation.
The final straw was the declaration by the head of the armed forces and the air force that Morales “should
resign.”

Earlier in the day, several ministers and government officials resigned amid the atmosphere of threats,
intimidation and violence unleashed by right-wingers.

Attacks
The past week has seen an escalation in these attacks. On Nov. 6, a series of violent racist and misogynistic
attacks against supporters and elected officials of MAS were carried out in the department of Cochabamba.
Patricia Arce, the mayor of the Vinto municipality, was kidnapped by an opposition mob and forced to
walk barefoot for several kilometers. They also cut her hair and poured red paint on her.

On Nov. 8, Fernando Camacho of the Civic Committee of Santa Cruz, the stronghold of the far-right
opposition, ratified his calls for an intensification of mobilizations, the immediate resignation of Evo
Morales, and for members of the Armed Forces and National Police to defect and not recognize the
Constitutional Government.

Reports began to circulate on Nov. 8 about groups of the police defecting and withdrawing from their posts
of safeguarding the state institutions and the society from the violent mobs.

Journalists employed by the state have also been attacked. Yesterday, a journalist was tied up to a tree by
right-wing opposition forces and the employees of a state-owned news station were driven out of their office
by right wing opposition protesters.

International support to Morales

The coup against Evo Morales has been denounced widely across Latin America by politicians and social
movements. Nicolás Maduro of Venezuela, who faced similar violent right-wing attacks against himself
and supporters of the Bolivarian Revolution, wrote, “We categorically condemn the coup d’état consolidated
against our brother, president Evo Morales. As the social and political movements of the world, we declare
ourselves in mobilization to demand the preservation of the lives of the Bolivian indigenous people, victims
of racism.”

Former Brazilian president Luiz Inácio Lula da Silva, who was released from prison after 580 days in an
unjust imprisonment on Friday, also expressed his rejection of the coup: “I just found out that there was a
coup d’état in Bolivia and that comrade Evo Morales was forced to resign. It is worrying that in Latin
America there is an economic elite that does not know how to co-exist with democracy and the social
inclusion of the poorest.”

Social movements, trade unions and leftist political parties across the continent have also expressed their
deep rejection of the coup and called on their bases to mobilize to reject the efforts by the racist Bolivian
elite to threaten democracy and put in danger the lives of the most vulnerable in the country.

The continental platform Social Movements of ALBA wrote, “This coup d’état is an embarrassing show
of how the elites in Bolivia do not believe in democracy, the OAS is an instrument of imperialist policy of
the US and it only allows governments to exist in the region that are controlled. The government of Evo
Morales always defended its sovereignty and its democratic process and that is why it was overthrown.
For Donald Trump, there cannot be a president who is a coca farmer, worker, and Indigenous person that
guarantees the well being of his people. For him, Bolivia should be a country controlled by a white, fascist
and racist minority willing to impose the neoliberal agenda under the designs of the IMF [International
Monetary Fund].”
“Finally,” the platform's statement continues, “we send energy on all women and men that have fought for
radical change in Bolivia in favor of the majorities. We are with you and we will continue forward. It is
the moment for resistance and regrouping to return, Bolivia will not go back to the darkness of neoliberalism.
The peasant, indigenous and first nations force will retake the historical struggle that during all of these
years we have accompanied and will continue to accompany.”

Confrontation and violence

Despite the culmination of the coup against Evo and his forced resignation, right-wing opposition groups
have not backed down on their violent, racially motivated attacks on members of MAS, Indigenous Bolivians
and the working class.

Right-wing leader Camacho wrote on Twitter calling for Morales’ arrest following his resignation. “Confirmed!!
Arrest warrant for Evo Morales!! The police and military will be looking for him in Chapare, the place where
he hid. The soldiers took away his presidential jet and he is hidden in the Chapare, go to him! JUSTICE!”
While the veracity of the arrest warrant is up for question, Camacho is calling for confrontation and violence.

The Venezuelan and Mexican embassies in the capital of Bolivia have also been under attack.

Edition: Peoples Dispatch