Extractive Capitalism and Exploitation in the Renewable Energy Industry

As the need to divest from fossil fuels has become increasingly urgent, renewable technology has been posited as an encompassing and holistic solution to the climate and energy crisis. This has led to significant growth in the lithium industry as a result of increased demand for lithium batteries, which are frequently used as storage devices for renewable energy. However, lithium mining is an extractive industry that can have negative effects on local communities, many of whom are forced to alter their ways of life and work in response to the health and environmental impacts of lithium mining. The vast majority of the world’s lithium reserves (57%) exist within the Lithium Triangle of Argentina, Bolivia, and Chile. These reserves are held in the Salar de Olaroz, Salar de Uyuni, and Salar de Atacama. Although lithium mining has been posited as a means for those within the Lithium Triangle who live below the poverty line to be trained in an emergent and lucrative industry, exploitation and dislocation of local communities is a prevalent risk, especially if they are not consulted in every stage of the process of development and extraction.



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Given that a large number of local residents are Indigenous subsistence farmers, and rely on local water supply for their livelihood, lithium mining poses an existential threat not only to local communities, but also their cultural traditions. Potential improvements to the emergent industry, therefore, ought to include stronger regulation of private companies involved in lithium mining and their water usage, revisions to the legal framework governing lithium mining in a way that no longer privileges private corporations over local communities, more equal partnership between local communities and lithium companies in a way that is mutually beneficial, and investing in sustainable and long-term reparations for impacted communities. Lithium’s water usage can be made more efficient by means of water recycling, minimizing waste and surface impact, and more efficient processing. Desalination can be integrated into the process in order to increase the availability of freshwater, however, this is a costly intervention. Concerns of environmental justice are central to the lithium industry, and, as renewable energy is posited as a solution to the climate crisis, it is important to acknowledge the extractive and exploitative nature of the practice, and continue to center community empowerment and active engagement in order to ensure the equitable distribution of environmental “bads” amidst the transition away from fossil fuels.


Those impacted most by lithium mining are often Indigenous communities. The Atacameños, Licanantay, Colla, Aymara, Kolla and Quechua are among the communities impacted by lithium mining across the Lithium Triangle. The governments of Bolivia, Chile, and Argentina each seek to exert control over the emerging lithium industry as a mechanism for national economic advancement, however, this is often done without consultation of traditional stewards, reinforcing a colonial legacy of extractive capitalism and exploitation that has long been prevalent in the Latin American continent. Although there are mechanisms that exist at the international level that attempt to prevent the exploitation of resource-rich Indigenous land by extractive governments for economic “development”, such as the 1989 International Labour Organization’s Indigenous and Tribal Peoples’ Convention 169 that states governments must consult with Indigenous people prior to development projects, communities continue to be neglected and taken advantage of for the sake of lithium development.


In Bolivia, in which the government intends to completely control the lithium extraction industry, the local population has experienced scant benefits; very few jobs have been offered and they don’t provide adequate pay. According to a local activist and leader in the Susques Luisa Jorge in Bolivia, “lithium companies are taking millions of dollars from our lands… they ought to give something back. But they’re not.” This lack of adequate compensation and consideration is reflective of an absence of fair negotiation between local communities and mining companies - these companies are often overrepresented in legal contracts to the detriment of impacted communities. Additionally, many Indigenous communities, such as the Atacama people in Argentina, have their own legal and political system - however, the state government maintains control over the mineral interests beneath their ancestral land. This power imbalance between colonizing and Indigenous authorities, as well as the slow violence of industrialization of the global south in order to meet the energy demands of the global north, perpetuates the same energy imperialism that exists at the core of the fossil fuel industry.

The environmental impacts of lithium mining are largely centered around water loss. Lithium is an extremely water-intensive industry, and the current method for extracting lithium results in the loss of roughly 95% of brine-extracted water, causing severe aquifer depletion. Extraction projects in Salar de Atacama have consumed 65% of the region’s water supply, drastically affecting local practices. The process of lithium mining includes intensive evaporation techniques in order to isolate lithium from other minerals - this technology poses a risk to human, plant, and animal life through unintended leaks and spills that can damage soil and aquatic ecosystems. In the Lithium Triangle, many locals are subsistence farmers who use community water resources to grow quinoa and rear llamas; water shortages caused by lithium extraction have already displaced Indigenous community members as they can no longer sustain their livelihood in their ancestral homes. The process can additionally have adverse effects on human health, as the toxic chemicals used during lithium processing, as well as trace amounts of lithium itself, can be found in community water sources and have been found to have adverse effects on human metabolism and neural communication.


There is also a concerning amount of worker exploitation within the lithium industry. The practice of operational continuity - which aims to maximize profit at the expense of the conditions of workers - has led to considerable negligence of public health. For example, during the summer of 2020, the COVID-19 positivity rate in the lithium mining region of Antofagas was 46.1%. This, coupled with the fact that demand for lithium increased considerably over the course of the pandemic due to increased reliance on digital technology, is indicative of a troubling willingness to partake in worker exploitation for the sake of extractive capitalism.


For such reasons, the emerging global lithium economy may be considered lithium imperialism. By continuing to exploit less economically developed or politically powerful communities for the sake of the energy needs of the global north, lithium imperialism upholds the same core-periphery relations and oppressive regime of extractivism and commodification of the natural world that have driven us to climate catastrophe. Positing renewable energy as a climate solution while simultaneously perpetuating imperialist extractive capitalism in order to maintain the energy consumption of the global elite is a direct deviation from the wider goals of the environmental movement. The mainstream environmentalist movement can do much more to center conversations of equity and justice within the renewable energy space, as opposed to positing renewable energy as a holistic and “clean” solution to the climate crisis. By focusing myopically on fossil fuel emissions, the larger goal of sustainable, balanced, and equitable relationships to the environment may be lost with the intent of simply sustaining industrial society on a different fuel source.


The Lithium Triangle is a clear example of a resource colony, in which extraction of natural resources exacerbates existing inequality and drains local communities. Such resource colonies are a manifestation of exploitation colonialism that thrives on sacrifice zones in order to uphold the functional legitimacy of capitalism at the expense of oppressed bodies in the global south. Historically, resource colonies have been held in companionship with the resource curse, which argues that it is not economically easy to convert extractive industries to local wealth or success. This is because extraction offers relatively few jobs compared to production, and what few employment opportunities it offers are likely more short-lived than those that might exist in the production industry, due to the heavily mechanized nature of extraction. Some explanations for the resource curse include that resource booms produce short-sighted policy, that resource exports favor certain interest groups that impede growth, and that resource booms tend to weaken state institutions in favor of corporate power. Finally, the resource curse is often a reflection of the fact that the relationship between localities and industry is not a partnership, but is rather rooted in payment, creating a power imbalance that often leads to exploitation.


The activist response to the lithium industry has involved advocacy at the local, state, and national level, as communities advocate for their right to farm the land, rather than sacrifice water resources to the emerging industry. Though some residents have been satisfied with compensation from mining companies including financial offers, employment, and investment infrastructure including building schools or creating scholarships, others question the efficacy of this compensation in the long term. Often, these provisions have replaced state services, again emphasizing symptoms of the resource curse and the economic stronghold the lithium industry has on community wellbeing. Indigenous activists are not exclusively against the industry, however, and according to an Argentinian community activist, “we are not against lithium. We just want our voices to be heard”. Community members have continued to emphasize that their opposition to the industry is largely focused on lack of agency over development and decisions, and that this conflict is directly connected to democratization and economic redistribution. In Chile, Indigenous populations have never been properly consulted regarding lithium mining, in spite of its ratification of the ILO’s Convention No. 169, mentioned above. In 2019, the Chilean state charged some communities for “water robbery” in response to an Indigenous protest against the intensive water use of the mining industry, paradoxically demonstrating that, in the eyes of the state, the economic value of water as a resource supersedes Indigenous communities’ dependence on water for their livelihood to the degree that they are not considered entitled to their own water source.


Although local activist efforts have remained focused on excessive water use, regional and national campaigns have taken a wider scope, targeting misconduct and corruption within mining operations, as well as foreign investments in the lithium business. Activism in the region has expanded over the past two decades, and a demonstration in Santiago, Chile, in 2019 drew hundreds of protestors and incited police violence, once again underscoring the colonial and violent nature of tensions between Indigenous stewards and state governments engaging in resource extraction. While the local focus may be the equitable distribution of limited resources, this is reflected in global advocacy calling for the democratization of resources and just compensation in the face of the economic implications of extractive capitalism and the resource curse.


Potential improvements to the lithium industry are both technological and regulatory in nature. The extractive process can be made more environmentally efficient and less water intensive by way of water recycling, minimizing waste, more efficient processing, and the minimizing of surface impact. Technical solutions for water conservation also include desalination, which, though a costly and energy-intensive process, increases the availability of freshwater. More innovation can also be made in the research of recycling raw materials used in lithium batteries - recycling lithium poses a challenge given that the cathodes degrade over time, giving lithium a limited lifespan. Research is currently underway focusing on alternative recycling techniques such as biological recycling by way of bacterial processing or the use of chemical solutions to prolong battery lifespan. Much like the early anti-toxics movement in the United States, it is important to recognize that focus cannot simply be put on a single end of the production cycle, and reducing demand for new minerals and extending their lifespan is as important as minimizing environmental impacts on the ground. Technical solutions are limited in their inability to address the roots of the issue, but rather serve to maintain the same practices, but with more efficient mechanisms.


Regulatory improvements offer more robust solutions for injustice surrounding lithium extraction. Enforcement mechanisms such as fines from a regulatory agency for the over-pumping of water may encourage companies to act in accordance with agreed-upon water distribution rules. Additionally, the legal framework governing lithium mining may be revised so as to privilege corporate interests less, and more adequately represent community and Indigenous perspectives. Mutually beneficial partnerships between companies and localities are not impossible, and indeed, Sales de Jujuy, a mining company operating in Argentina, explicitly works toward this goal. 65% of its employees are Indigenous, and they are paid an above-average salary for their region, as well as receive medical and dental benefits. The company additionally provides micro-loans to support innovation and community health. Most crucial to the improvement of the industry is providing adequate reparations and investment in community wellbeing, which only emerges from genuine and respectful partnership between industry and local populations. Not only should community members have a say in development projects that occur in their regions, but such decisions should be made public and readily accessible, so as not blindside those most impacted. Reparations and community investment should also focus on long-term and sustainable benefits, rather than the short-term boom often associated with resource colonialism.


While renewable energy is posited as a solution to the climate crisis, extractive capitalism and energy imperialism persist in the lithium industry, as communities in Chile, Bolivia, and Argentina face environmental and public health challenges due to local mining projects. Lithium mining is a water-intensive industry that depletes community water resources in the already scarce region of the Lithium Triangle, resulting in displacement of Indigenous communities as well as disruption of traditional cultural practices. Such disruption and displacement is done in the name of upholding the energy economy and the energy needs of the industrialized global north. This power dynamic establishes the Lithium Triangle as a resource colony, and as such, it faces the resource curse - a short-lived boom of extractive industry that ultimately fails to translate to sustained economic growth or community benefits. In order to combat the exploitative nature of lithium and its harmful effects on local communities and ecosystems, community members must be properly consulted on the decision-making process of development of lithium mining, as well as be heard in demands for adequate compensation and reparations. Such reparations ought to be sustainable in the long-term, in order to counter the short-lived economic boom and subsequent bust often prevalent in extractive economies. Technical solutions would also make lithium extraction more water efficient, and, with effective regulation and enforcement, may serve to ensure the just and equitable distribution of scarce water resources between industry and community members whose livelihoods are dependent upon water accessibility. Although the need to divest from fossil fuels is urgent, renewable energy posits the same concerns of extractive capitalism, namely unequal core-periphery dynamics, and economic imperialism in order to uphold an industrial and ultimately unsustainable global energy economy. By ensuring that community interests are fairly represented and just compensation is provided, the emerging renewable energy economy may work to challenge the legacy of the resource curse.



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