Over the past 13 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 rather 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 toward the
transnational 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 is the “fuel that will feed the
world.” Bolivia was unable to make deals with
Western transnational 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 Transnational Firms
When Evo Morales and the Movement for
Socialism took power in 2006, the government
immediately sought to undo decades of theft by
transnational mining firms. Morales’ government
seized several of the mining operations of the
most powerful firms, such as Glencore, Jindal
Steel & Power, Anglo-Argentine 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 that 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.
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On August 1, 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 pushon 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 Mutún, a contract that was
put on hold by the Morales government in 2007.
In July 2012, Jindal Steel terminated the
contract and sought international arbitration
and compensation for its investment. In 2014, it
won $22.5 million from Bolivia in a ruling from
Paris-based International Chamber of Commerce.
For another case against Bolivia, Jindal Steel
demanded $100 million in compensation.
The Morales government seized three
facilities from the Swiss-based transnational
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 the Anglo-Argentinian company’s
stake in natural gas producer Chaco by the
state. 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’s 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 percent 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 about 12,000 feet (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
Yacimientos 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 canceled
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 Tianqi 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 transnational mining companies.
Tesla (United States) 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 takeover of the lithium fields
by the non-Chinese transnational firms. He had
to go.
After the coup, Tesla’s stock rose
astronomically.
Vijay Prashad
is the Director of
Tricontinental: Institute for Social Research
and Chief Editor of
LeftWord Books.
He is a Writing Fellow and Chief Correspondent
at
Globetrotter, a project of the Independent
Media Institute. He writes regularly for The
Hindu, Frontline, Newsclick, and BirGün.
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