Accepted Manuscript

Bolivia's lithium frontier: Can public private partnerships deliver a minerals boom forsustainable development?

L. Hancock, N. Ralph, S.H. Ali

PII: S0959-6526(17)33258-4

DOI: 10.1016/j.jclepro.2017.12.264

Reference: JCLP 11659

To appear in: Journal of Cleaner Production

Received Date: 30 October 2017

Revised Date: 19 December 2017

Accepted Date: 29 December 2017

Please cite this article as: Hancock L, Ralph N, Ali SH, Bolivia's lithium frontier: Can public privatepartnerships deliver a minerals boom for sustainable development?, Journal of Cleaner Production(2018), doi: 10.1016/j.jclepro.2017.12.264.

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Bolivia’s Lithium Frontier: Can Public Private Partnerships

Deliver a Minerals Boom for Sustainable Development?

HANCOCK, L.a*, RALPH, N.b, ALI, S.H.c, d

a. Personal Chair in Politics and Public Policy, ARC (Australian Research Council) Centre of Excellence for

Electromaterials Science, and Alfred Deakin Institute for Citizenship and Globalization, Faculty of Arts and

Education, Deakin University, 221 Burwood Highway, Melbourne, Victoria, 3125, Australia. Email:

linda.hancock@deakin.edu.au

b. Associate Research Fellow, ARC (Australian Research Council) Centre of Excellence for Electromaterials Science,

and Alfred Deakin Institute for Citizenship and Globalization, Faculty of Arts and Education, Deakin University,

221 Burwood Highway, Melbourne, Victoria, 3125, Australia. Email: n.ralph@deakin.edu.au

c. Blue and Gold Distinguished Professor of Energy and the Environment, Department of Geography & Center for

Energy and Environmental Policy, University of Delaware, 220 Pearson Hall, Newark, DE 19716, United States.

Email: saleem@udel.edu

d. Professorial Research Fellow, Sustainable Minerals Institute, University of Queensland, St. Lucia, Queensland, 4070,

Australia, Email: s.ali3@uq.edu.au

*Corresponding author, linda.hancock@deakin.edu.au, +61 (0)417057501

Highlights:

• Lithium is key to transitions to clean energy technologies and offers development

• Bolivian resource nationalism has led to a hybrid mineral development path

• Public-private partnerships (PPPs) in mineral development need investor confidence

• Evaluative frameworks for PPPs, and their development impacts, are thus needed

• For sustainability, PPPs can link with the global Sustainable Development Goals (UN SDGs)

(8056 words)

1. Introduction

In this paper, we start from the materials central to the global transition to low carbon energy and focus

on lithium used for energy storage batteries, as a key transition material. We investigate how the desire

for cleaner technologies has cultivated unusual partnerships between state enterprises and foreign-owned

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ACCEPTED MANUSCRIPTprivate corporations, often in developing countries rich in alternative energy materials. Focusing on

Bolivia, we consider the efficacy of vertically integrated mineral development and public-private

partnerships (PPPs) in developing remote mineral reserves for advanced technologies in developing

countries. These will be necessary for assuring an economically and ecologically efficient transition

towards less reliance on fossil fuels internationally. New energy transition governance measures also have

potential to address broader sustainable development goals and ethical issues, which were high on the

agenda in the Paris 2015 United Nations Climate Change Conference (COP21).

Lithium remains key to low carbon global transitions given its unique properties as the lightest metal with

unparalleled energy density ability for storage, allowing solar, wind and other non-continuous energy

development to be more effectively harnessed (Lu et al. 2017). Lithium is also vital for energy efficient

hybrid and battery-electric cars to reduce pollution. It has been defined as a ‘critical material’ by the

United States (US), United Kingdom (UK), European Union (EU) and Geoscience Australia (Executive

Office of the President 2016; Geoscience Australia 2016; Skirrow et al. 2013, 11-2; WWF-Ecofys 2014).

To meet this demand for lithium, with minimal environmental impact and to facilitate broader sustainable

development and ethical supply chains, novel approaches to international partnerships in resource

extraction that transcend ideological biases are needed, and their efficacy evaluated. In this article, we

discuss the debate on cleaner technologies for lithium production, explain the Bolivian focus and outline

the Morales Government’s vertically integrated mineral development model. We then explain how PPPs

link with the UN SDGs and set out some principles for an evaluative framework. Our research aims to

pave the way towards an evaluative framework, using Bolivia’s lithium as a central case.

2. Lithium production for clean energy technologies

Markets for cleaner technologies currently favor lithium batteries due to reduced costs and their technical

and performance advantages over other battery types (IRENA 2015; Climate Council 2015). The market

has moved away from lead and sodium-sulphur to lithium-ion batteries, based on energy and power

density, decreased cost and deep discharge cycle life (IRENA 2015, 27). Lithium is also used in many

products including mobile phones, pharmaceuticals, building tools and aeronautic systems and

increasingly, for vehicle, household, business and community-scale energy storage.

Demand for lithium is already resulting in a rush for security of supply (Diss 2017). Even if other materials

overtake lithium or displace energy storage for intermittent energy source back-up needs, lithium is

clearly in high demand as a transitional material. Lithium demand has increased at 20 per cent year on

year (Knight 2014). With a projected rise in electric cars, lithium is predicted by some to exceed supply by

2023 (Oprey 2017). Lithium’s increasingly cost-competitive use in household and vehicle battery systems

will also impact globally and in some geographic regions like the EU, the experience may result in a

lithium bottleneck (Mieema & Moll 2013). During the next two to three decades, with low current rates of

recycling, lithium supply will come under increasing pressure (Prior et al. 2013; Ali et al. 2017). “That

leaves battery makers and other end users of lithium largely at the mercy of the big providers” (O’Brien

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ACCEPTED MANUSCRIPTand Nickel 2016). Five companies control 46 per cent of global reserves (Albemarle, Sinchuan Tanqui,

SQM, FMC, Ganfeng) (Deutsch Bank 2016, 8).

Lithium production is currently concentrated in Chile, Argentina, Australia, China, the US, Canada and

Zimbabwe (Prior et al. 2013, 786). Resources are mined either as lithium ore, producing lithium hydroxide

(for example, Australia) or lithium brine (66% of global lithium mining) producing lithium carbonate (as

found in the Salar de Uyuni, Bolivian salt flats) (Lu et al. 2017). There are vast amounts of largely

untapped of brine deposit supply in the ‘lithium triangle’ – Bolivia, Chile and Argentina. Table 1 compares

lithium brine extraction to hard rock ore extraction mining, including geological features, extraction

techniques, some economic geology advantages and disadvantages, processing, environmental impact,

extraction permit process and future extraction technology.

<<Insert table 1 here>>

3. Bolivia’s moral imperative message and the challenges of developing lithium

Bolivia is pertinent for two main reasons: its leadership on arguing developed countries’ international

moral culpability for climate debt repayment and promotion of lithium as a national resource priority under

resource nationalism. Its plans for lithium industrialization through vertically integrated mineral

development and PPPs with foreign corporations, are aimed at harnessing the most environmentally

appropriate technologies and jobs for development across the lithium supply chain. Since before the 2009

UN Copenhagen Climate Change Summit, Bolivia (a vocal member of the Least Developed Countries

group), has led calls for climate justice and the moral imperative of developed countries to acknowledge

climate debt repayment for the impact of climate change on some of the world’s poorest countries (Ross

2013). After the failure of the Copenhagen Summit to acknowledge climate debt justice, Bolivia’s

President Morales convened the 2010 World People’s Conference on Climate Change held in

Cochabamba. The Cochabamba Declaration (2010) announced that the North’s repayment of the climate

debt had to be “the basis for a just, effective, and scientific solution to climate change” (World People’s

Conference on Climate Change and the Rights of Mother Earth 2010). This stance was repeated at the

Paris 2015 COP21 and further articulated in the 2017 Bonn UN Climate Change Conference COP23 climate

change adaptation and mitigation discussions (IISD 2017).

President Morales, elected in 2005 as a champion of indigenous self-determination with strong Marxist

roots, has been a vocal critic of private corporate investment and the neoliberal era that preceded his

election in 2005. His nationalization programs were widely criticized by the US and its allies and he

gravitated towards Venezuela and Cuba as key allies (Dávalos 2017).

In 2008, President Morales announced a strategic plan to develop Bolivia’s lithium. Bolivia has the largest

single reserve of lithium and is predicted to experience a lithium boom around 2020 (Sagárnaga López

2015). The silver mines of Potosi (exploited for over 500 years), claimed an estimated eight million lives

through accidents, pollution and disease since their opening in the Spanish colonial period, and have been

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around lithium mining and its environmental and social impact is acute in Latin America’s most

indigenously populated country. (More than sixty per cent of Bolivians identify as indigenous from thirty-

six recognized tribal groups). As Figure 1 shows, most of Bolivia’s lithium deposits are found in

municipalities with high levels of poverty and the responsible development of the sector has the potential

for improving the per capita income of these regions.

Figure 1. Map of Bolivia showing lithium deposits in Southern Bolivia mapped against percentage of

population below the poverty line

<<Insert Figure 1 here >>

Lithium production in Bolivia is hindered by several challenges. These include the remote geographic

location of lithium deposits, a long rainy season and flooding of the salt lakes, high levels of magnesium,

limited water resources (necessary for processing) and potential negative environmental impacts (see

table 1). There is also a lack of infrastructure such as roads and of technological expertise in evaporative

mining (COHA 2009; Revette 2016; Sanderson and Schipani 2016).

In 2014, Bolivia announced the largest state investment in a new mineral in the country’s history.

President Morales undertook to invest $995 million to develop the Salar de Uyuni’s lithium reserves. The

world’s largest lithium reserves have been promoted as a panacea for developing one of Latin America’s

most impoverished countries which has an environmental and social legacy of damaging mineral

exploitation. Yet, the Morales Government’s plans for developing lithium have created a more complex

story, partly motivated by a desire to harness the most environmentally appropriate technologies for

national benefit. In this regard, Bolivia initially partnered with Germany, building on strong historical ties

between the two countries, to seek new lithium carbonate processing methods that avoid creating

considerable amounts of sludge – a concern raised by environmentalists. Imprudent mining operations

could damage the fragile ecology of the 10,000 square kilometer Salar de Uyuni (Boissoneault 2015); and

could risk undermining the burgeoning Salar tourist industry.

Lithium mining comes with environmental risks due to intensive use of water (at the expense of

agriculture), use of toxic chemicals in processing and environmental waste disposal issues. Critics of

mining note that current practices by Sumitomo Corporation in the controversial San Cristóbal open-pit

silver, lead and zinc mine, also in the Potosi region, include large water-intensive (50,000 litres a day)

and open-pit mining that threatens local soil and water quality (COHA 2009; Minority Rights Group

International 2012). The slow rate of high-altitude evaporation also impacts on the economic gathering of

lithium, as well as the size and environmental footprint of ponds developed for evaporation. Evaporation

rates are lowered by Salar de Uyuni’s rainfall levels, wet season and cooler climate. High levels of

magnesium in Bolivian lithium deposits may reduce commercial viability as the magnesium must be

separated.

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magnesium from lithium and also with reduced water intensity, as noted by Canadian firm Pure Energy

Minerals (Oprey 2017). It has been suggested that rather than focusing on lithium, the production

processes should consider magnesium as highly valued co-production alongside lithium (EV World 2017).

Managing concerns of intellectual property and negotiating revenues of such a production system based

on its application in Bolivia’s strict state controlled environment will be important challenges.

New, cleaner technologies are being developed, aimed at overcoming many of the technical, chemical and

environmental hurdles. Rising lithium prices and predicted lithium shortages fuel research and

development innovation; including experimental technologies in reverse osmosis, which attempt to

shorten the evaporation time-lag of one-to-two years for high-concentration brine (Martin 2015). Once

extracted, lithium is processed for use in batteries, including as components and/or electrolytic salt, but

few companies worldwide have this capacity (COHA 2009; Sanderson and Schipani 2016).

If the challenges of lithium extraction and processing are overcome, lithium industrialization has the

potential to facilitate Bolivia’s and Latin American neighbors’ transition to renewables. Bolivia has set a

target of 79 percent renewable energy by 2030, Costa Rica (100 percent by 2030), Uruguay (95 percent

by 2017), Belize (85 percent by 2027) and Guatemala (80 percent by 2030) (REN21 2016, 109). In 2013,

Bolivia had one of the lowest electrification rates in South America (88 percent) and an estimated 1.2

million people without access to electricity, but a target of 100 percent by 2025 (REN21 2016, 151).

To facilitate lithium production and industrialization, Bolivia has committed to a vertically integrated

governance model based on PPPs with private sector companies, seen as crucial to implementating new,

clean technology bracketed to national socio-economic advancement.

4. Bolivia’s vertically integrated mineral development

Internationally, the prevailing extraction model in developing countries is that of extractivism, where

materials are extracted, transported or shipped, with processing, manufacturing and marketing of

minerals and products taking place elsewhere. Processing countries frequently have low restrictive

environmental regulation and cheap labor, thus transferring emissions to processing countries whilst also

depriving source countries of industry development, jobs and technological innovation. Bolivia’s lithium

production and industrialization plan is aimed at preventing this loss of industry development by declaring

mineral extraction a national priority and developing value-added manufacture alongside extraction for

Bolivian jobs and advancement. President Morales dismissed simply exporting refined lithium; promoting

lithium industrialization spanning the value chain from lithium production, cathode and battery

manufacturing, to electric vehicles, marketing and export. Morales stated: “We want partners – not

owners of our natural resources” (COHA 2009). Foreign investors must accept Bolivian state majority

ownership and a vertically integrated model planned to facilitate battery production domestically. This

model aims to avoid the historical interface between mineral extraction by foreign corporations, continuing

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2013; Canessa 2014; Revette 2016).

The 2009 Bolivian Constitution made significant changes to the relationship between the state, the people,

and natural resource exploitation. Resources are acknowledged as the property of the people of Bolivia for

national benefit. Communities are formally guaranteed consultation before resources are exploited in their

territory (Carbonnier and Zamora 2013; Revette 2016). Bolivia has sought to protect sovereign control of

its valuable resources by vesting ownership in the state, with the state mining company Comibol, heading

up lithium industrialization. Comibol has outlined an industrialization plan with three phases: the pilot

phase (goal: to produce 40 tons of lithium carbonate per month); industrial phase (goal: annual

production of 30,000 tons); and battery production phase (Revette 2016). In 2016, the Financial Times

reported that lithium carbonate and potassium chloride were produced at a Comibol-run pilot plant and

that by 2021, Bolivia aims to export 10,000 tons of lithium carbonate, 168,000 tons of potassium chloride

and 5,000 tons of lithium cathodes. In August 2016, Bolivia accomplished its first small shipment of

almost 10 tons of lithium carbonate to China (Sanderson and Schipani 2016).

In terms of governance, lacking technology, expertise and capital to sustainably develop its lithium,

Bolivia has entered into partnerships with foreign companies with clean energy expertise (Sanderson and

Schipani 2016). By 2014-2015, the German company K-UTEC Ag Salt Technologies was contracted to

design a lithium carbonate pilot plant, the Chinese company Linyi Dake Trade was contracted to establish

a lithium-ion battery pilot plant (Oprey 2017), the Chinese company CAMC Engineering was partnered to

build a potassium salt industrial plant (Sagárnaga López 2015; Pagina Siete 2015) and the French

company ECM Greentech signed a contract to build a pilot plant for producing lithium cathode materials

(La Razón 2015; Revette 2016). The Japanese company, Sumitomo Corporation which owns Bolivia’s

largest mine, the San Cristobal mine (lead, zinc and silver) at Potosi, has also stated its intention to

become involved in a lithium mining project (Sumitomo Corporation 2017).

Information on these partnerships is not readily available. Carbonnier and Zamora (2013, 524) advised

that: “[i]nformation is limited, leaving room for speculation on the extent to which the [lithium

industrialization] project will be a success and how far scientific collaboration with foreign partners (Japan,

South Korea) is being pursued.” A recent field trip by the current authors indicates that Chinese company

CAMC Engineering has a dominant role in the mining/refinement plant on the Salar; reinforced by the first

lithium export going to China. The Bolivian Government also contracted Chinese company CITIC Guoan on

a pilot lithium extraction project and Linyi Gelon New Battery Materials Company to build a battery factory

in Coipasa (Ellis 2016, 8). Through low interest loans and goods donations such as vehicles, China has

leveraged substantial foreign investment across a range of sectors in Bolivia. The relationship between the

Morales Government and the Chinese Government has deepened, but with an unhealthy Bolivian balance

of trade. The model of using Chinese financial support for national development projects also raises

problems, including the perceived poor quality of Chinese products and services contracted by the Bolivian

Government and provided by Chinese companies (Ellis 2016, 12).

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Mining investors from the private sector often identify ‘resource nationalism’ as a key risk in mineral

development projects worldwide. For example Grimley (2015), based on Ernst & Young’s 2014 report on

Business Risk Radar for Mining and Metals, warned that “mandated beneficiation and state ownership has

been the most dramatic pattern of recent resource nationalism”. Bolivia’s politics in the last decade have

been highly influenced by nationalist populism over natural resources. In 2006, Morales renationalized the

hydrocarbons industry (Radhuber & Andreucci 2014). This caused disquiet among some international

investors and in 2016, the Swiss mining company Glencore, announced its arbitration proceedings against

Bolivia over the nationalization of some of its assets (COHA 2009; O’Brien 2016).

The private sector defines ‘resource nationalism’ as a form of protectionism limiting the activities of

external private sector entities in a country’s primary industries. In Latin America, Mares (2010, 6) notes

resource nationalism is predicated on the notion that “natural resources in the ground or under the sea

are the property of the nation rather than of a firm or individual who owns the surface area. Therefore,

natural resources are a ‘national patrimony’ and consequently, should be used for the benefit of the nation

rather than for private gain.” This often results in state-owned enterprises (SOEs) playing a dominant role

in resource extraction.

The success of such SOEs is highly variable, with examples of relative success in countries like Chile, and

financial meltdown in countries like Venezuela. During the past decade, Bolivia has observed the perils of

mismanaged resource nationalism in its allies, Venezuela and Cuba. Thus it has been revisiting resource

nationalism with greater willingness to embrace private sector engagement. The focus has shifted from

domestic ownership to domestic employment, with regulations ensuring there are no more than 15 per

cent foreign employees in resource development projects. Morales noted that while foreigners are

welcome to collaborate, the country would retain 60 per cent of revenues from any partnership agreement

(Lazenby 2016). Although Bolivia had originally hoped to attract major firms such as Sumitomo and

Mitsubishi of Japan, which showed tentative interest, its success in sealing deals with German K-UTEC Ag

Salt Technologies and Chinese Linyi Dake Trade for example, is seemingly tempered by slow progress

(Sanderson and Schipani 2016; EV World 2017).

In a November 2016 call for proposals for constructing and equipping a lithium carbonate plant and later

industrialization stages of lithium, Bolivian official sources reported interest from at least 26 foreign firms

(El Periódico International 2017). Firms bidding must however, have overcome skepticism stoked by the

recent nationalization examples and the government changing the tender closing date three times,

creating uncertainty. The likelihood of these firms reaching agreements acceptable to the Bolivian state

(which aims to operate, produce and commercialize resulting products) will require a long-term view of

resource investments and an integrative approach to Bolivia’s salt flat assets. These may for example,

incorporate lithium and magnesium production alongside other by-products such as borax, on a large

scale. Investment experts are concerned the country is returning to a form of resource nationalism which

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EV World 2017).

Given their tepid experience with PPPs thus far, on March 31, 2017, the Bolivian parliament sought to

move forward by establishing a new SOE (la Empresa Pública Nacional Estratégica de Recursos

Evaporíticos [ERE]). ERE is to replace the Gerencia Nacional de Recursos Evaporíticos (GNRE) which has

been responsible for developing lithium reserves and was overseen by Comibol. ERE is responsible to a

new Ministry of Energy, separate to the Ministry of Hydrocarbons, which has been tasked with shifting

Bolivia from gas to renewables, developing electricity generation from clean energy rather than fossil

fuels, and using lithium batteries for energy storage (Eju 2017a). ERE will hold 100 per cent ownership

and invest in new (chemical) processing technologies to produce lithium and its by-products (Prensa

Latina 2017). It can still contract with domestic and foreign firms for lithium industrialization processes,

but will maintain majority state ownership. Part of the reason for this return to a more public-centered

investment model has been frustration the country has encountered with technology transfer from foreign

firms over the past five years.

Thus the Bolivian experiment with public-private partnerships with foreign firms within a resource

nationalist framework has been underwhelming. Its recent embrace of a more domestically focused

approach suggests two key elements potentially necessary for effective mineral production and

industrialization (and for further research):

• Hybrid models of state control and foreign private investment in technology minerals like lithium,

which have highly volatile and focused markets, require a close research interface between the SOE

and private firm on new extraction and processing technologies. This requires the SOE to have the

capacity to engage and implement such research; and may include for instance, a partnership

contract necessitating that such close research is conducted and outcomes shared.

• SOEs can only be effective in developing technology mineral assets if they have the research

capacity to develop cost-effective products. This capacity requires investment in mineral research

and education within the country.

Bolivia may have to wait for some time before it can meet these two criteria for harnessing its lithium

reserves effectively. An EU funded study (Gottwald, Buch and Giesecke 2012) assessed Bolivia’s higher

education and research and development in renewable energy as largely absent. This is due to low levels

of technology transfer, adaptation and innovation; low capacity within university staff and research

infrastructure; insufficient education/research programs caused by a lack of long-term strategy and

financing; and little connection between market needs and research and education. Perhaps tellingly, the

study discussed forms of renewable energy (such as hydropower), but not energy storage such as lithium

batteries. If Bolivia is not to be reliant on foreign firms for years to come, it will need to develop the

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develop its capacity for technology transfer, adaptation and innovation.

There may be opportunities for international organizations concerned with supply security for renewable

energy infrastructure such as the International Renewable Energy Agency (IRENA), as well as

development donors to play a constructive role in these arrangements. The country was historically highly

suspicious of institutions such as the World Bank Group, and particularly the International Finance

Corporation, which has in turn led to it being deprioritized in development donor activity. Since 2014,

however, there has been a rise in the government’s collaboration with the bank. In the words of Morales:

“Previously, the World Bank was our Enemy; Now it is our Friend” (The World Bank 2014). While World

Bank activities tend to focus on water and sanitation rather than energy, regular bi-monthly training is

touted as crucial for progress on project success at the community level (author personal communication

with World Bank official June 2017).

Approaching the matter from a technology transfer perspective may be appealing to both Bolivian

authorities and development donors. This can promote the upscaling of new prototypes of mineral

refinement techniques, and build educational capacity in Bolivia for these techniques. This technically-

driven approach may provide an opportunity for science diplomacy to prevent the negative impacts of

resource nationalism from being realized, and allow for more constructive epistemic engagement between

public and private sectors.

For developing countries, technology transfer requires adaptation to local raw materials and environmental

conditions. Upgrading technology requires even higher innovation capabilities. Technology and ‘know-how’

for how to do things is entrenched in organizational structures and is not cheap to transfer. A developing

country’s ability to absorb, adapt and improve technologies depends on the capacity of its ‘national

learning system’ and ‘technological learning capacity’ in people and organizations. Investments in human

capital (financial, management, entrepreneurial, technical skills, interaction and information) and

technical/scientific research and education are crucial. This requires good governance and capabilities in

the public sector, institutional structures (universities, research and education, government agencies,

companies, networks) and political support, to acquire and adapt technologies and later, innovate. These

factors may be weak or missing in developing countries, causing weak research capacity and the need for

support to develop such capacity (Chandra and Kolavalli 2006, 5, 19).

6. Public-private partnerships, technology transfer and sustainable development

PPPs can act as mechanisms for technology transfer alongside foreign direct investment and licensing, and

industry-specific policies, sometimes conducted with donor support. These might include finance for

foreign-local research and development collaboration, local-content policy, publicly funded research,

technology transfer agreements, joint ventures, support for industry organizations, science and

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rule of law and property rights (Chandra and Kolavalli 2006).

In developing countries like Bolivia, under state-led lithium industrialization, clean technology transfer can

be incorporated into the aims of PPPs as part of the critical implementation of sustainable development.

This could underscore environmental, social, political and indigenous rights aspects. In the case of the

Bolivian Government’s partnerships with foreign companies, public interest outcomes may hinge on the

extent to which regulatory bodies exist, or their effectiveness and the extent to which scrutiny by non-

governmental organizations (NGOs) is effective. Critics have argued that Bolivian state-led lithium

industrialization does not leave “much space for debate with domestic stakeholders (private sector, civil

society organizations, the academic community)” (Carbonnier and Zamora 2013, 524). Some foreign

partner corporations may be subsidiaries of transnational corporations with regional differentiation in work

practices and standards. Others, for example Chinese companies, may be private or state-owned, bringing

complex governance relationships to negotiations, contract conditions and project governance.

PPPs have a checkered history in public policy program evaluation, and frequently involve large

infrastructure projects contracted between governments and private corporations. In developed countries

from the 1990s onwards, privatization of public corporations such as utilities, led to a raft of regulatory

reforms at national level aimed at licensing, monitoring, regulatory enforcement and mechanisms to

address market failure and negative public interest impacts (Bovaird 2004; Hodge et al. 2010). PPPs are

not always found to be more efficient and better value-for-money (Romero 2015). They can increase the

risk of corruption with poor transparency, public scrutiny, accountability, governance and redress for

affected communities (Colebatch 2009; Hodge et al. 2010). Reviews of the World Bank Group’s PPP use

during 2002-2012 and of literature on PPPs in developing countries, found little evidence that PPPs

benefited effectiveness and development outcomes (Independent Evaluation Group 2013, 63, 101).

Governments and financial institutions need to create tools to identify at country-level the circumstances

under which PPPs are effective (Romero 2015). This requires international assistance for technical support

and capacity building, internationally accepted PPP guidelines and a common definition of PPPs (Jomo et

al. 2016).

In line with sustainable development, development-focused principles and criteria will be important as part

of establishing and assessing PPPs (Romero 2015; Powell 2016, 2). PPPs can therefore benefit from

aligning with the UN SDGs, which are leading the global development agenda for 2015-2030.

7. Developing an evaluative PPP framework aligned to the Sustainable Development

Goals

PPP guidance materials already exist from such organizations as the EU, World Bank and United Nations

Economic Commission for Europe (UNECE). Good governance principles for PPPs should focus on policy,

capacity-building, legal framework, risk-sharing, procurement, putting people first, and the environment.

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transparency, accountability, fairness, efficiency and sustainable development (UNECE 2008). In 2015, the

UNECE (2015) stated that this guidance required revisiting in terms of the SDGs, and in specific sectors

such as sustainable resource use and renewable energy.

A PPP International Standard Development Process was established, with the goal of developing a list of

PPP standards that align with the SDGs, across a number of sectors including renewable energy (solar,

wind, hydroelectricity and biomass), off-grid rural electrification and energy efficiency in public

buildings (UNECE 2015 3, 6). This was accompanied by the First International UNECE PPP Forum which

addressed ‘people-first’ PPPs as a tool to contribute to the UN SDGs. A 2016 follow-up forum discussed

key elements of successful PPPs and the challenges in emerging markets and economies in transition

(UNECE 2016). Importantly, the forum also highlighted promotion of a new culture of good governance

and a zero-tolerance approach to corruption and bribery.

The United Nations (2015) Third International Conference on Financing for Development brought together

193 countries to affirm the Addis Ababa Action Agenda, which included a set of underlying principles for

PPPs. These principles aim to promote fair sharing of risks and benefits/returns; avoiding undue subsidies

to the private sector and undue risks for the public sector; meeting social and environmental standards;

aligning investment with sustainable development, accountability and transparency across the PPP cycle;

ensuring debt is tracked and managed; and should adhere to principles of development effectiveness

(United Nations 2017). In this paper, we propose that for sustainable resource production and use in

developing clean energy technology, the evaluation of a country’s resource-related PPPs should consider

two central criteria assessing: (a) PPPs’ contribution to the country’s specific SDG targets and (b) partner-

company’s Corporate Social Responsibility (CSR) reporting and ethical supply chains for public interest

outcomes.

(a) Assessing PPPs’ contribution to country-specific SDG targets

Each country could have its own specific key SDG targets to which a PPP can be aligned. Ways that a PPP

and the partner-company can support these targets, can be found in reports prepared either by UN

agencies or within the ‘SDG Industry Matrix’ created by the UN Global Compact and KPMG (Global

Compact & KPMG, 2017a). These reports map various industries onto the 17 SDGs to illustrate each

industry’s particular strengths and to give specific ideas for private/public sector action for each SDG. A

related ‘SDG Compass’ also guides companies to define strategic priorities, assess and measure

performance, set goals and report (Global Compact, GRI & WBCSD 2015). The SDG Compass and industry

mapping reports could be used as guidance when establishing a PPP and ways the PPP can support priority

SDGs. They could also guide how the PPP will be assessed regarding its success in supporting the SDGs.

Of particular relevance to sustainable resource production and industrialization are the industry mapping

reports covering ‘energy, natural resources, chemicals’ (Global Compact & KPMG 2017b), industrial

manufacturing (Global Compact & KPMG 2016), and mining (UNDP 2016).

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Some examples of action by ‘energy, natural resources and chemicals’ companies (and thus related PPPs)

include:

• Goal 7: ‘Ensure access to affordable, reliable and sustainable modern energy for all’ -

o develop shared energy systems that give surrounding communities access to affordable

energy;

o share energy sector knowledge with local governments so they overcome barriers to energy

access and can develop new solutions;

• Goal 9: ‘Build resilient infrastructure, promote inclusive, sustainable industrialization/innovation’ –

o contribute data and knowledge to local research and development projects to support

innovation and capacity building;

• Goal 10: ‘Reduce inequity within and between countries’ –

o apply impact assessments in remote areas to learn how to design operations that decrease

inequalities and avoid increasing the risk of conflict (Global Compact & KPMG 2017).

(b) Assessing PPPs in relation to CSR reporting and ethical supply chains for public interest outcomes

Companies committed to CSR and ethical supply chain reporting are more likely to report on socio-

environmental targets, and the SDGs if they have committed to them, as a means of reporting on their

contribution to public interest outcomes. Firm’s CSR and supply chains can focus on clean technology

transfer and support for a developing country’s technical/scientific capacity as part of their contribution to

sustainable development.

CSR and supply chain reporting are predominantly based on private sector focused voluntary regulation.

Therefore, NGOs monitoring private sector endeavors in this space tend to act as international watchdogs

of corporate CSR/supply chain reporting - filling the gap between public global governance and

monitoring. PPPs in which the partner-company is (at the minimum) encouraged to demonstrate good

practice in CSR and supply chain reporting, are also more likely to demonstrate good practice in

sustainable development and technology transfer.

Beyond companies fulfilling basic responsibilities in CSR (such as committing to the UN Business and

Human Rights Guidelines, and reporting through the Global Reporting Initiative), there are regulatory

frameworks of further relevance to PPPs in mineral production and industrialization. These frameworks

cover ‘conflict minerals’ and ‘critical materials’. Conflict minerals can fund conflict and human rights

abuses due to their being mined in conflict-prone areas such as the Democratic Republic of Congo (DRC).

Examples are wolframite (tungsten); columbite-tantalite (also known as coltan from which tantalum is

derived); cassiterite (tin); and gold; or their derivatives (OECD 2016). Critical materials are critical for

developing clean energy and high-technology products (Executive Office of the President 2016). It is

crucial their high demand does not risk future damage environmentally or socially, in communities.

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Examining the efficacy of a PPP in terms of partner company practices and reporting on conflict minerals

and critical materials may strengthen a PPPs’ sustainable development outcomes. Examples of voluntary

regulatory frameworks that PPPs can utilise are the OECD Due Diligence Guidance for Responsible Supply

Chains of Minerals from Conflict-Affected and High-Risk Areas (OECD Guidance 2016) and Guidelines for

Social Responsibility in Outbound Mining Investments, developed by the China Chamber of Commerce of

Metals, Minerals & Chemicals Importers and Exporters (Banyiyezako 2015).

A noticeable gap in reporting by private companies involved in mining and clean technology development,

is the lack of publicly available information showing if they have CSR or ethical supply chains policies, or

policies on conflict minerals and critical materials. For example, a search for CSR, sustainability, conflict

minerals or critical materials-related policies was undertaken on the websites and listed policy documents

of the four companies identified as linked to Bolivia’s lithium development. CAMC Engineering Co. Ltd

advocates “social responsibility”, however the company states it focuses on philanthropy (CAMC 2017).

Philanthropy is worthy, but does not represent embedded social and environmental responsibility within

the firm’s core business practices or its commitment to UN SDGs. There is little information on the

website, but the company highlights its aim to benefit shareholders and employees (CAMC 2017b). The

other companies, K-UTEC Ag Salt Technologies (K-UTEC 2017), ECM Greentech (ECM Technologies 2017)

and Linyi Dake Trade (B2BMit 2017), display no relevant policies on their websites.

Hybrid models of PPPs around mining can be found in neighboring Chile which also has major lithium

reserves. The country has published a strategy for PPPs that includes research and development of new

technologies in partnership with science and its technology research organization. Chile went through a

deliberative process with a National Lithium Commission and laid out key targets for its PPP program (BTG

Pactual 2016). In order for such an approach to work in Bolivia, there also needs to be concomitant

investment in science and technology education and an effort to prevent a ‘brain drain’ from the country.

Chile’s lithium plan is a direct government partnership with a signed protocol between state mining

company Codelco and the country’s innovation and economic growth organization, Corfo. Working in

tandem, they are more likely to provide foreign private investors with a long-term incentive to move

forward with viable projects that reap development dividends, rather than boutique frontier investments

aimed at merely testing market stability.

8. Conclusion

A key vulnerability of the transition from a fossil fuel driven economy to a low carbon economy, is the

international governance void across crucial mineral supply chains. Countries such as Bolivia that are well-

resourced in critical materials are vulnerable to such a governance void and to the downfalls of public-

private partnerships documented over the last twenty years. Lithium mining to support the global demand

for electric storage devices could bring development to neglected parts of the country and fiscal flows to

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regions.

A well-planned approach to developing these minerals through effective governance of the public and

private sector and on trial in Bolivia via PPPs, could help develop a domestic clean energy industry. This

could also could bring electricity and battery storage to the 1.2 million households without it. Furthermore,

if there is appropriate coordination with research organizations, academia and international donors, there

is potential to use this resource boom as a means of delivering other sustainable development goals,

including education, clean water delivery and improvement in Bolivian quality of life.

Bolivia may only have a short window of opportunity to exploit its resource advantage, as lithium batteries

may be overtaken by other new technology in a rapidly changing competitive market in energy storage

(COHA 2009; OECD 2016b). The international and Bolivian desire for clean technologies and sustainable

development in the context of Bolivia’s calls internationally for carbon debt reduction and resource rights,

has cultivated unusual partnerships between state enterprises and foreign-owned private corporations.

This demands analysis of PPPs’ efficacy for developing remote mineral reserves required for advancing the

technologies necessary to facilitate global energy transitions and address broader sustainable

development goals. Our research aims to pave the way to an evaluative framework for this model of PPPS

and vertically integrated mineral development in developing countries. The evaluative framework can

potentially be used internationally to support best-practice application of clean technologies for resource

production.

Acknowledgments

Funding from the Australian Research Council Centre of Excellence Scheme (Project

Number CE 140100012) is gratefully acknowledged. ARC Centre of Excellence for Electromaterials Science:

www.electromaterials.edu.au

The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the

manuscript.

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Table 1. Comparison of Lithium Brine and Hard Rock Ore Extraction Mining

Attribute Lithium Brine extraction Hard Rock Ore Extraction

Geologic feature

(global % of lithium)

Salt flat precipitates

(66%)

eg. Bolivia, Chile, Argentina,

China, Tibet

Mineralized ore in rocks

(44%)

eg. Australia

Extraction technique Evaporation pools Crushing, roasting and leaching

lithium ore

Economic Geology

Advantages

Easier to explore; softer rock in

flat arid barren areas; shallower

drilling for geophysics; faster

production set-up; less capital

required.

Faster processing schedule;

lower start-up costs; additional

costs for upgrade to battery

grades

Economic Geology

Disadvantages

May be in remote areas

requiring longer transport,

power, water and labor

networks; Slower production

schedule (evaporation time)

Topographical challenges

harder and more complex to

explore and sample rocks for

viability

Processing Evaporation of brines pumped

to surface evaporation pools;

Pumped to processing plant for

extraction of boron and

magnesium

Treated with sodium carbonate

(soda ash) to precipitate

lithium carbonate

Hydrometallurgical processes;

Crush and heat ore in rotary

kiln; Mixing with sulphuric acid,

roasting; removal of

magnesium and calcium;

adding soda ash, filtering,

drying to produce lithium

carbonate

Environmental

impact

Large water usage

requirements; chemical

concentrates input and

disposal; Biodiversity concerns

Deep land excavation; Acid

usage and drainage concern;

Air emissions of roasting

process; Biodiversity concerns

Extraction permit

process

‘Placer deposits’ easier to

permit due to reduced

ecological impact

More complex environmental

permitting process due to

impacts

Future extraction

technology

Mechanical brine extraction

Not proven commercially

Clay (similar process to

spodumene)

Not proven commercially

Sources: Bell (2017); Dajin Resources (2015); Desjardins (2017)

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