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TOP STORIES / WORLD / AMERICAS

Date 02.08.2018
AMER I C A S
Author Victoria Dannemann

Peru’s vast lithium discovery: A risky Related Subjects Sustainability,

economic boon? Mining, Peru

Keywords Peru, lithium, mining,

industry, batteries, raw materials,
A vast deposit of hard-rock lithium could bring riches to Peru, but it also poses
sustainability
environmental and societal questions. The megaproject would take place in an
Send us your feedback.
archeological zone that is also rife with poverty.
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An estimated 2.5 million tons of lithium carbonate have been discovered deep in Peru's southern
region of Puno, near the border with Bolivia and Lake Titicaca.

Canadian mining company Plateau Energy Metals Inc. made the announcement last month, saying it
marked the first discovery of hard-rock lithium deposits in South America and could become one of
the largest mines in the world.

The finding was located in a prehistoric lake in northern Puno, where a large deposit of uranium was
also discovered. It would be groundbreaking for Peru, but it would also pose a host of challenges, from
the geopolitical and economic to the social and environmental.

High demand for lithium

The news has raised expectations, given that a growing demand for batteries has tripled the price of
lithium carbonate in the past three years, with a current value of $12,500 (€10,750) per ton.
Executives from Plateau Energy Metals have estimated that Peru's exports of the highly lucrative
mineral could yield $500 million per year, beginning in 2021.

Read more: Will Europe make its own e-car battery cells?

"There are a lot of expectations, but also distrust within the local and regional populations over the
impacts that the project could have. Peru is facing a complicated political moment as it searches for
government stability, but it is also at an economically challenging time," Narda Henriquez, sociologist
at the Catholic University of Peru (PUCP), told DW.

Mining can bring economic benefits to a country, but it can also carry high costs, including humans ones

A scenario ripe for conflict

The last 15 years have seen a rise in the commercial exploitation of raw materials in Latin America,
with an increase in large-scale mining and extraction activities. "At the same time, almost every one of
these countries experienced surging social conflicts associated with these projects," said Bettina
Schorr, director of trAndes, a joint research program on sustainable development run by Peru's
PUCP and the Free University of Berlin.

A lithium megaproject would raise the same risk of conflict from disputes over redistribution,
territory, participation and the environment. "Mining has environmental costs like water and ground
pollution, especially for those who live near it. Water shortages, too," Schorr told DW.

Socioeconomic problems, wealth that does not reach the poorest in the area, and the arrival of
newcomers looking for work would all make the situation more complex.

Henriquez notes that in the past, the government of Peru has not shown concern for environmental
regulations. Currently, problems of judicial corruption and political stability are the main priority.

Read more: Are corrupt politicians behind Peru's palm oil plantations?

PERU : F I G HTING A CORRUPT BUSINE S S

Profitable plant
The oil palm bears around 6000 fruits. As the demand for palm oil increases, so has its economic
importance.

1 2 3 4 5

A region of archeology and poverty

"Puno is one of the most populated regions of Peru and its northern part, where the deposits were
discovered, is one of its poorest areas, with a high rate of child malnutrition. Local communities and
authorities are likely to pay close attention to how the project will affect health, water sources and the
local agricultural production,” Henriquez said.

She believes the government should have a strong presence and monitor the project, for the benefit of
the local communities.

Read more: Africa's governments put pressure on mining groups

Both Schorr and Henriquez have observed the immediate effects that mining investments have in
these communities. "New buildings turn into money-eating projects, or university scholarships are
handed out, but these benefits are short-lived and localized. There is never a strategy on sustainability
or how to tackle inequality," Henriquez notes.

Another challenge will be the region's cultural

and archeological value. The Canadian mining
company has asserted that the lithium deposits
lie outside of this area and although uranium
deposits were found within it, these will not be
directly affected.

Plateau Energy Metals has also pledged to work

with environment and archeological
Experts point out that the while the global north receives
consultants, local communities and Peruvian
the energy benefits of lithium, the global south's exporting
authorities to develop a protection plan for
countries bear mining's high costs
protected areas that may be close to future
infrastructure projects.

Sustainable development

The road ahead is long, and the project is barely in the exploration phase. For the uranium deposits,
the Peruvian government will have to start with creating new legislation to regulate radioactive matter,
as none currently exist. Experts believe this will be a good opportunity for the country to develop a
long-term strategy on mining that makes sustainability and diversification part of a new
environmental policy.

At the international level, Peru's lithium project touches on the unresolved debate between those
countries that export raw material and those who buy it from them. "In the global north, lithium helps
countries have cleaner energy, but its production is very dirty for the Andean communities. They pay
the price. We still need to discuss how to curtail this imbalance," Schorr concludes.

Watch video 04:09

German-made electric car batteries

DW R E C O MMENDS

Chile's lithium – blessing or curse?

Salar de Atacama is rich in lithium, essential to electric cars and other low-carbon tech. But indigenous people
are fighting its extraction, saying private interests are cashing in at the expense of their environment.
(11.05.2018)

Bolivia's Evo Morales plans lithium mining offensive

The Bolivian government aims to pump massive investments to expand the country's production of lithium, a
metal needed for the batteries that power everything from smartphones and laptops to hybrid and electric cars.
(17.07.2017)

Will Europe make its own e-car battery cells?

The future of Europe's carmakers depends on reliable supplies of cheap lithium-ion cells, a key component of e-
car batteries. But such cells are nearly all made in Asia. Does Europe need its own Li-ion cell supply?
(10.04.2018)

Africa's governments put pressure on mining groups

Strict laws, high taxes: Africa's governments are looking more closely at foreign mining companies. In future,
more locals will benefit from the extraction of raw materials. But the strategies are controversial. (19.08.2017)

Are corrupt politicians behind Peru's palm oil plantations?

In recent years, Peru's sprawling jungle has been cleared for palm oil and cocoa plantations. Conservationists say
the land is controlled by private companies who acquired it through corrupt means. (31.05.2018)

Peru: Fighting a corrupt business

The sell-off of farmland in the Peruvian rainforest to foreign multinationals has led to the establishment of huge
palm oil and cocoa plantations as well as mass deforestation. (21.02.2018)

WWW L I N KS

trAndes Sustainable Development Program

trAndes Sustainable Development Program

AUDI O S AND VIDEO S ON THE TOPIC

German-made electric car batteries

Date 02.08.2018

Author Victoria Dannemann

Related Subjects Sustainability, Mining, Peru

Keywords Peru, lithium, mining, industry, batteries, raw materials, sustainability

Feedback: Send us your feedback.

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