Implications of the MAS Mining Politics for the Lithium Project

Policy making in the “process of change” is burdened by the inconsistency of the different political goals of the Morales administration. In the MAS movement, the discursive orientation towards vivir bien stands in contradiction with the extractive orientation that marked the Bolivian economy for nearly 500 years and is also named the basis of economic policy making in the new Constitution. The MAS has successfully used resource income for social spending, job creation, and poverty alleviation. These positive impacts, however, come with the downside of extractive expansion in indigenous and protected areas. In the light of these developments, particularly urban groups within and outside of MAS found their post-developmentalist strategies rooted in the concept of vivir bien no longer represented in the commodity-based modernization project implemented by the government of Evo Morales (Bertelsmann Stiftung 2016). Yet, resistances against extractivism as a development model and the resulting environmental and social impacts proved less relevant than economic mining conflicts over rent distribution.

Nonetheless, critical scholars describe Bolivia as a profoundly neo-extractive society. As the Argentinean sociologist Maristella Svampa (2013, 79) formulates it, Bolivia has developed from the neoliberal Washington “Consensus of Monetization” to a “Consensus of Commodities”. Under President Morales neoliberal criticism, popular politics and a discourse of sovereignty coexist with a commodity-based development model which incentivizes an extractive expansion that has in many cases violated the rights of local communities (ibid.). At the same time, the mining sector has “been used as a political tool to strengthen the discursive claim of the recuperation of the natural resources” (interview with mining analyst H. Pacheco, 18.4.2016).138

Attempts to consolidate public mining in Bolivia did, however, fail. After more than 10 years of the “process of change”, mining in Bolivia is, just as in the times of the tin barons, fundamentally organized around private capital (Fundación Jubileo 2012; CEDIB 2013). Many scholars agree that the initially proposed structural transformations in mining have not taken place (Fundación Jubileo 2012; Molera Simarro and Paz Antolín 2013; Quiroga Trigo 2014; Radhuber and Andreucci 2014; Ströbele-Gregor 2015). Despite the unique opportunity of a particularly long mining boom and

138 _{Original quote: “Entonces, es una minería que no ha mejorado en términos de inversión, no ha mejorado en temas de tecnología de} explotación y demás, y solamente ha sido utilizado como una herramienta política para fortalecer el discurso reivindicativo de recuperación de los recursos naturales.”

stable political majorities, the Morales government did not use its leverage for systematic reforms and investments in mining exploration and modernization. Rather, they continued a political mining project initiated during the neoliberal structural adjustment period of the 1980s. The government also stayed committed to procyclical resource-money-based investment policies, which are only beneficial at high resource prices. In boom years, this has deepened rentier state developments, as the mushrooming of mining cooperatives demonstrates, while the current bust years could, similar to post-1952 developments, support debt creation and macroeconomic imbalances (compare Auty and Gelb 2001).

A central problem in the public mining sector is that different cash transfer programs were directly linked to resource income. Additionally, the expansion of personnel in the sector, for example in Huanuni and Corocoro became a financial and social challenge. High mineral prices and state selectivity have also favored the politically influential cooperative sector, which could expand and consolidate as a mining actor. Cooperative miners counteracted the change process in mining, opposing the nationalization of mines and the reestablishment of a strong public mining industry (Quiroga Trigo and Avejera Udaeta 2014).139 _{The rise of cooperative mining coincided with a surge}

in violence, which, in the light of decreasing prices, is accelerating further. Simultaneously, price declines limit the government’s ability to distribute income selectively to pacify the cooperative sector and other mining actors. Consequently, nationalizations in mining were, rather than part of a strategic industrialization agenda, reactions to popular demands.

The failure of political reform in mining resulted in the disappointment for the members of the MAS movement that had hoped for more profound structural changes in mining. Former MAS senator and mining professor Carlos Sandy (interview, 9.11.2015) expressed this sentiment in an interview with me:

“And everybody thought that with the government of Evo Morales we would return, would take another turn at state exploitation, the creation of new businesses. What has happened is the complete opposite; everything has been handed over to the mining cooperatives.”140

139 _{This was also mentioned in interviews with mining analysts C. Sandy (9.11.2015), J. Campanini (28.3.2016),}

H. Pacheco (18.4.2016) and J. Villalobos (4.12.2015).

140 _{Original quote: “Y todo el mundo pensaba que con el gobierno de Evo Morales íbamos a retornar, retomar otra vuelta a la} explotación estatal, creación de nuevas empresas. Ha ocurrido totalmente lo contrario; todo se lo han entregado a las cooperativas mineras.”

The swelling mining violence, the power of cooperatives, the failure to transform the mining sector structurally, the near bankruptcy of state mining sites, and widespread problems in government industrialization initiatives (Karachipampa, Mutún etc.) reflect negatively on the MAS. Evo Morales has made government leadership in resource extraction a central pillar of his political agenda, while the multiple shortcomings of state mining prevent real change. It is against this problem-laden panorama that the importance of the lithium program becomes clear. Lithium does not face all of these challenges and is hardly affected by the difficulties that burden state mining in general.

First, lithium and potassium industrialization is free of historic cooperative demands. With both resources declared strategic, meaning they can only be exploited by the central government, cooperatives have limited access to these projects. Moreover, the complexity of lithium industrialization does not make it a good target for cooperative mining, which lacks the technical and professional capacity (interview with mining analyst H. Pacheco, 18.4.2016). Against this background, cooperative lithium exploitation is improbable, making the lithium project a flagship initiative for the agenda of public mining sovereignty envisioned by Evo Morales in the beginning of his presidency. Second, lithium, in comparison to traditional mineral resources, has not seen price declines and the impoverishment of deposits. Rather, its value is increasing and Bolivia holds the largest resources worldwide. Third, after many historic failures of industrialization in the mining sector, the most visible being the ruin of Karachipampa, the lithium program has taken steps to begin lithium-ion battery production. This is indicative of technological industrialization in Bolivia, a notable development.141 _{Fourth, contrary to resources that were already exploited under previous}

governments and within existing contractual frameworks, the MAS administration is able to design resource politics with less preconditions and fully within the logic of its own political project. Finally, unlike all other COMIBOL projects, lithium exploitation has not resulted in any major conflicts. Thus, the lithium project could, through its non-cooperative, strategic, industry-focused, and peaceful character, be a real alternative to traditional mining endeavors. It stands out as the only MAS mining project that has real potential for long-term success and consequently has developed into a poster child of the government’s industrialization strategy in mining.

President Morales has personally pushed the lithium project from the very beginning and has charged his confidante and former Minister of Mining and Metallurgy Alberto Echazú with the

implementation of COMIBOL’s largest initiative. While COMIBOL was weakened in the struggles with cooperative miners and by the new mining law, the lithium organization GNRE grew stronger and more autonomous over the same period. The GNRE received funding for its flagship project and, as will be shown, can act with administrative autonomy. In result, the public, sovereign approach to natural resource governance originally envisioned by the MAS administration is visible in lithium mining and processing. To what extent is discussed in the following case study chapters.