by VIJAY PRASHAD
The overthrow of the elected leader cannot be understood without a glance at the nation’s massive reserves of this crucial mineral.
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 transnational 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 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.
“The idea that there might be a new social compact for the lithium was unacceptable to the main transnational mining companies.”
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.
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 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 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.
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