The Ukrainian war for lithium

Lorenzo Maria Pacini

Associate Professor in Political Philosophy and Geopolitica, UniDolomiti of Belluno. Consultant in Strategic Analysis, Intelligence and International Relations

 The geopolitics of rare earths and precious metals require constant observation in order to understand some global events in greater detail.

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Why lithium attracts so much attention

There are moments in History that are characterized by a strong economic component, so predominant that we are said to be facing a revolution, passing through the ever dramatically present moment of war. Since the end of the 19th century that the world has been witnessing wars over oil; now, however, we have been a few years into those over rare earths, among which lithium, a mineral indispensable for smartphones and especially electric cars, plays a privileged role.

Foreign Office documents, examined by a British historian and journalist, show that the UK organized from top to bottom the overthrow of President Evo Morales in order to seize Bolivia’s lithium reserves. Nothing new under the sun: the U.S.-Great Britain axis has been dirty business for centuries already, and this is hardly the first planned subversion or export of democracy by bombs and coups.

Think back for a moment to the overthrow of President Evo Morales, all the way back in 2019: at that time the Western media asserted that Morales had turned Bolivia into a dictatorship and for that reason the people threw him out. The Organization of American States (OAS) published a report certifying that the elections had been rigged and that the restoration of democracy was taking place. President Morales, fearing that he would end up like Chilean President Salvador Allende, fled to Mexico and denounced a coup d’état, organized to hoard the country’s lithium reserves. Having failed to identify its instigators, he got nothing but sarcasm in the West. Only Réseau Voltaire revealed that the operation had been carried out by a community of ustascia Croatian Catholics, settled in Bolivia – in Santa Cruz – since the end of World War II, a kind of NATO stay-behind network, as it is called in the jargon. A year later, President Morales’ party won the elections by a very wide margin. There were no challenges and Morales was able to return triumphantly to his homeland. Morales’ supposed dictatorship never existed, while that of American lover Jeanine Áñez was overthrown by the ballot box.

Historian Mark Curtis and journalist Matt Kennard obtained access to desecreted Foreign Office documents and studied them, publishing their findings on the website Declassified UK, which moved to South Africa after being subjected to military censorship in the UK-again nothing new, it is now the practice of democratic “free expression.” Curtis’ merit is that he has shown how UK policy has not changed at all since decolonization: it emerges that the overthrow of President Morales was commanded by the Foreign Office itself and elements of the CIA that escaped the control of the Trump administration, with the goal, as mentioned above, of stealing Bolivian lithium, coveted by the UK as part of the energy transition. As early as 2009, the Obama administration attempted a coup, but Morales succeeded in foiling it and many U.S. diplomats and officials were expelled from Bolivia. The Trump administration, on the other hand, has seemingly left the field open to Latin American political leaders, yet systematically prevented them from implementing their plans.

But what is so interesting about lithium? Simple: it is an essential element of batteries, and in a world where we push beyond hyper-digitization and technological hybridization of daily life, lithium means money and power. This metal is found mainly in the natural salt solutions of lakes in the Andean desert highlands in Chile, Argentina and, in particular, Bolivia (the “lithium triangle”), as well as in Tibet in salares, also found in solid form in certain minerals extracted from Australian mines. At the technical level, it is indispensable for the transition from gasoline to electric vehicles, and with the Paris agreements to combat atmospheric warming, it has become more important than oil in perspective.

In February 2019, President Morales authorized a Chinese company, TBEA Group, to exploit the country’s main lithium reserves, and it was then that the United Kingdom hatched a plan to appropriate it. Morales became president of Bolivia in 2006, politically partly representing producers of coca, a local plant essential to life at high altitude. Morales’ election thus marked the return to power of the Indians, excluded since the era of Spanish colonization, over a trade of very high international value.

In this regard, Thierry Messian summarized some of the milestones of the lithium race:

• From 2017-2018 the UK sent experts to the national company Yacimientos de Litio Bolivianos (YLB) to assess the conditions for exploiting Bolivian lithium.

• In 2019-20 London funded a study to optimize lithium research and production in Bolivia by means of British technology.

• In April 2019, the U.K. Embassy in Buenos Aires organized a seminar with representatives from Argentina, Chile, and Bolivia, as well as mining industry and government leaders, to present the benefits they would gain from using the London Metal Exchange. A minister from the Morales administration also attended.

• Soon after the coup, it emerged that the Inter-American Development Bank (IADB) was financing the British projects.

• Long before the coup, the Foreign Office commissioned an Oxford company, Satellite Applications Catapult, to prepare a map of lithium reserves; however, the company was not paid by the IADB until after Morales was toppled.

• A few months later the U.K. Embassy in La Paz organized a seminar attended by 300 players in the lithium supply chain, with the assistance of the company Watchman UK, which specializes in engaging populations in projects harmful to them in order to prevent them from revolting.

Before and after the coup, Bolivia’s British Embassy neglected the capital, La Paz, to take a special interest in the Santa Cruz region, the one where the Croatian Ustashas legally took power, as cultural and commercial events flourished. Eight months before the coup, in order to neutralize Bolivian banks, the British Embassy scheduled a seminar on cyber security, where they introduced the company DarkTrace, created by the British Internal Security Services, and explained that only banking institutions that would use its services for their own security would be allowed to operate with the City.

According to Curtis and Kennard, the United States did not participate directly in the plot against Morales, however, CIA officials left the agency to organize it. A planned “betrayal”? That is not certain, while it is common knowledge that DarkTrace recruited Marcus Fowler, a CIA specialist in cyber-operations, and especially Alan Wade, a former intelligence chief, from among its ranks, forming a team that has very little to do with “banking.” Then again, most of the personnel who took part in the operation were British: among them Watchman UK managers Cristopher Goodwin-Hudson (former career military man, later director of Security at Goldman-Sachs) and Gabriel Carter (a member of the very private Special Forces Club of Knightsbridge, who distinguished himself in Afghanistan).

The historian and journalist acknowledge that the British Embassy provided the Organization of American States with the data it needed to “prove” electoral fraud; a report debunked first by Massachusetts Institute of Technology (MIT) researchers, then by the Bolivians themselves, in the subsequent election. The U.K. prefers short wars and covert operations and does its best to keep them undetected by the media. By means of a host of news agencies and media outlets, which it secretly funds, it directly controls the public perception of its presence, imposing unmanageable living conditions on the populations of the country it wants to exploit, creating a kind of vicious circle for which the only way to interrupt the socio-political problems generated by British subversion is to resort to the British themselves.

Ukraine as a reservoir of interest

According to preliminary estimates, researchers believe Ukraine is a lithium treasure trove, with about 500,000 tons of the “nonrenewable mineral that makes renewable energy possible.” Lithium has become virtually irreplaceable in electric vehicle (EV) batteries due to its efficient energy storage capacity per unit weight. The soaring growth in global demand for lithium in the coming years is estimated to be between 400% and 4,000%. Demand will exceed supply, and without greater investment in mining capacity, costs could become prohibitive for electric vehicle adoption. Elon Musk’s dream of lowering prices to attract new customers was already dashed when Tesla announced a price increase of more than $2,370 for its Model Y vehicle soon after the crisis began.

Lithium is critical to the success of a clean energy future. The loss of access to one of the world’s largest potential sources of lithium oxide has raised concerns about the world’s ability to close the supply gap. There is now a need to focus more on domestic lithium mining, especially as countries realize the immense risk of internationalizing global energy supplies. But in the United States, for example, lithium mining is an extremely controversial topic. Ironically, traditional lithium mining causes substantial damage to the environment, contaminating local aquifers and potentially killing endangered species.

Over the past 8 years, lithium production has increased 9-fold, from 20 to 180 thousand tons, which has only partially stabilized its cost, which increased 9-fold to $75,000/ton in the 2020-2022 period, and then decreased in 2023 to $47,000/ton. According to forecasts by global rating agencies, the growth of lithium consumption in the next 10 years will occur at a high intensity, and with current demand, the world industry’s need for this material will increase 4.5 times from 800 to 3.8 million tons by 2035. The research conducted allows us to indicate the high potential of Ukraine’s mining and raw material base in supplying global technology chains with lithium raw materials. Ukraine in fact has significant lithium deposits that can be estimated at 500,000 tons (up to 10 percent of world reserves), concentrated in rare metal granitoids. The deposits have been recorded in the Krivorozhka-Kremenchutsky suture zone and in the central part of the Ukrainian Shield. The most promising for development are the Polokhvskoye deposit and Dobra site in the Kirovograd region, Shevchenkovsky in the Donetsk region, and Krutaya Balka in the Zaporozhzhye region. These deposits contain petalite ores with a lithium content of 3 to 4.5 percent. According to estimates by the State Commission on Reserves of Ukraine, in 2018 the Polokhvskoye deposits amounted to 27 million tons of ore with a precious component content of more than 1 percent, while the Shevchenkov deposit contained 13.8 million tons of lithium ore with a lithium oxide content of Li2O – 1.5 percent. A general assessment of Ukrainian lithium deposits established that they are represented by petalite or spodumene-petalite varieties, which are difficult to enrich compared to the conditions of hydromineral ores in salt lakes.

Ukraine, therefore, is a basin of great interest. The defense of the new territories that have joined the Russian Federation is a categorical imperative for Russia in order to take away from Western interests significant economic potential, the use of which in the strategic sector should not be underestimated. On the other side of the front, it is clear how the West is trying everything not to lose territorial control, at the cost of sacrificing all Europeans in an unnecessary war because the morsel is too appetizing.

The ever-developing routes of the geopolitics of rare earths and precious metals require constant observation in order to understand some global events in greater detail.

https://strategic-culture.su/news/2024/10/28/the-ukrainian-war-for-lithium/