Bottled Lightning

by Seth Fletcher

  The head waiter came into the room and demanded attention. The next course would be one of those that made Chef Savoy famous in Paris many years ago: a mosaic of milk-fed poularde, foie gras, celery root, and black truffle jus. It came out looking like the most expensive slice of pimiento loaf in the world.

  Grossmann lived in Monaco, near the casino, she told the man sitting next to her. She moved there nine years ago; it’s much more of a small town, more of a true community, she said, than its reputation as a haven for international oligarchs might suggest.

  The head waiter announced another course that made Guy Savoy famous: water-based artichoke and black truffle soup, topped with floating shavings of black truffle and parmesan and paired with a mushroom brioche roll served with black truffle butter. When the waiter finished his exposition on the dish and left the room, all conversation was silenced.

  “Yuhko and I went truffle hunting in Piedmont,” Ed Flood told the table.

  Sitting across from me was Oscar Ballivian, a Bolivian geologist and consultant for the French industrial giant Bolloré, which had been sniffing around Bolivia’s lithium reserves for some time. In 1981, Ballivian and a partner became the first scientists to measure the lithium levels of the Salar de Uyuni. Since then he has consulted for what seems like every corporation or government that has ever had any reason to be interested in lithium. I told him that I’d like to come visit Uyuni, and he gave me his card and offered to help. “We don’t get meals like this in Bolivia,” he said with a wink. “If you e-mail me and mention this dinner, I will remember.”

  Ballivian may not get meals like this in Bolivia, but he surely gets them elsewhere. He came to Las Vegas from Barcelona, and before that he had been in Paris. Last year he traveled to Paris five times in his role with Bolloré. He spoke self-deprecatingly on behalf of his country, sighing while explaining the difficulties of exploiting Uyuni’s lithium motherlode. Bolivia’s president, Evo Morales, insists on developing the resource without outside investment, and according to Ballivian, the government has no idea what it is doing. Unless it brings in outside technical expertise, it’s not going to happen. Bolivia is one of the poorest countries in the western hemisphere, and the Salar de Uyuni is located in one of the most remote and unforgiving corners of that country, at an altitude of twelve thousand feet above sea level. Bolivia is landlocked; diplomatically, the government is tighter with Chávez in Venezuela than with Obama in America.

  “The only problem with Bolivia is Bolivianos,” Ballivian told me. I wasn’t sure whether he was referring to the currency or the citizens, but he followed with a clarifying joke. “God is making Bolivia,” he began, “and he says, ‘We’re going to give this country all the copper, all the tin, the fruits, the vegetables, the animals …’ Someone says, ‘Are you sure you want to give all this to one country?’ And he says, ‘Well, wait until you see the human beings we’re going to put there!’”

  After beef tenderloin topped with a tripe-white blob of bone marrow, and dessert, we were ushered out. We said good-bye to Ed Flood and Yuhko Grossmann, who would not be visiting the lithium mine site with us the next day. Yuhko had already seen it from a helicopter, and Ed was visiting his mother in Reno. The rest of us would rise before dawn to catch a charter flight north.

  I walked downstairs and out to the front of the casino with a fashionably suited Canadian mining analyst, whom I asked, What’s the deal with Ed Flood? “He’s a guy who had a few big plays, a few big wins.” He played, and he won. Regarding the extravagance of the dinner, the talk of Monaco, the tales of truffle hunting, he informed me simply, “That’s what you get with the mining industry.”

  The next morning, nineteen mining industry types and I gathered in the casino to catch a bus to the airport. It was cold, and as I stood chatting with an employee of the large French metallurgical firm Eramet, a sunrise the color of glowing sandstone shone down on the fake Eiffel Tower in the distance. A Santiago-based marketing rep from SQM would be visiting Western Lithium that day, as would assorted other investors, analysts, the man in charge of the U.S. Geological Survey’s annual report on lithium, and various international seekers of a steady supply of the mineral: scouts from the major Asian electronics corporations, a Japanese brokerage house, the Korean steel firm POSCO.

  At McCarren airport, the casinos and hotels of the strip looming in the distance, we walked out onto the tarmac and boarded a chartered prop plane. “Up to beautiful Winnemucca,” our pilot said drily. (He would be spending the day at beautiful Winnemucca’s minuscule airport.) We flew northwest along the Nevada-California border, skirting the bombing ranges and UFO test grounds of central Nevada. Below, the corrugated rust-and-brown landscape was dusted with snow. To our left, Death Valley. To our right, Yucca Mountain and Area 51.

  Halfway through the flight, our tour guide, a Western Lithium geologist named Dennis Bryan, announced that we were beginning to approach Chemetall’s brine-based lithium operation in Silver Peak, Nevada. The crowd rushed to the windows like boys on a schoolbus gawking at a passing Ferrari. (Chemetall does not seem to welcome the new competition in the neighborhood. The day before, I had asked Monika Engel-Bader, the husky-voiced German president of Chemetall, what she thought of Western Lithium’s prospects. “They don’t have a chance,” she said wearily while lighting a cigarette.)

  From the Winnemucca airport we boarded a bus for an hour’s drive north. We left that small mining town of bad motels and sad casinos and crossed the Humboldt River, the body of water that the forty-niners followed west in search of gold. There is still gold in these hills—some of the largest gold-mining companies in the world operate out of Winnemucca—but the days of striking arm-sized veins are gone. Now, gold mines are generally open-pit operations that chemically rake flecks of “no-see-um gold” from what appears to be, because it is, dirt.

  Bryan was an enthusiastic tour guide. Over the bus intercom he explained the centrality of mining and gambling to his home state. Gaming and mining, respectively, rank as Nevada’s top two industries. Mining is actually why this place was granted statehood; during the Civil War, Abraham Lincoln needed the silver from Nevada’s Comstock Lode to finance the Union Army, and so in 1864, this land of gambling and mining and gambling big on mining became the thirty-sixth American state.

  Twenty million years ago, Dennis told us, this region was downright Hawaiian in its volcanism. Volcanoes leave behind interesting stuff when they die: gallium, uranium, gold, mercury, potassium. Lithium, of course. We were headed to the McDermitt Caldera, an ancient collapsed volcano, a vastly older and more eroded version of the natural phenomenon most commonly associated with Oregon’s Crater Lake. After the volcano’s collapse, a geological phenomenon called basin-and-range faulting began, drawing north–south-oriented swaths of land down, toward the center of the earth, leaving mountain ranges on the edges and generally rendering the landscape unrecognizable (except to a geologist) as the site of once-violent volcanic activity. Ten thousand years ago, this landscape—north-trending mountain ranges intercut with sagebrush plains, some of which have been plowed and irrigated and implanted with alfalfa and potatoes—lay beneath a lake that stretched from Reno to Oregon.

  In the 1970s, Chevron Resources was searching for uranium in the McDermitt Caldera when they detected an “anomalous clay lens” that was extraordinarily high in lithium. This, of course, was during the short-lived alternative-energy frenzy. Chevron drilled holes, tested core samples, explored, mapped the land in detail—and then the 1970s ended, recession hit, Reagan became president, oil became cheap again, and sitting on the rights to a giant lithium deposit no longer meant a damn thing. “They were thirty years too early,” Bryan said. In 2005, Western Uranium took over the Chevron claims, which Chevron had sold in 1991 to another company, which subsequently let the claims expire. In 2007, Western Uranium spun those claims out into a separate company, Western Lithium. The land beneath which this lithium-rich clay resides is, like more than 80 percent of the state of Nev
ada, federal land, but Western Lithium currently holds two thousand mining claims on it, each one covering twenty acres.

  In the geological order of things, lithium is what the Princeton geologist Kenneth Deffeyes described to me as a “misfit.” When the lava from northern Nevada’s volcanic days began to cool and harden into granite, a number of common elements made their way into freshly baked granite, but water and a medley of minerals including lithium were left out. The “leftover juices,” as Deffeyes calls them, grew into veiny, crystal-rich rocks called pegmatites. The particular pegmatite that happens to be high in lithium is called spodumene (which is what Talison and Galaxy Resources are mining and purifying into lithium carbonate in Australia). Sometimes, these rocks get melted again; when they cool, they can form a rock called rhyolite. A particular strain of rhyolite that’s rich in sodium, potassium, and lithium happens to be found near a number of major lithium deposits, including Bolivia’s Salar de Uyuni and the Western Lithium site we’re visiting today. The theory is that over time, the water table leaches lithium out of rhyolite and it moves around underground, eventually settling in a comfortable spot. That Western Lithium’s deposit is bound up in clay makes perfect sense. “Lithium loves clay,” Deffeyes said.

  We drove by a crumbling, forgotten gas station that looked like a stage prop from a film about the postoil apocalypse. Tumbleweeds should have been rolling by. Chmelauskas, the company president, grabbed the microphone from Bryan and proclaimed that one day, all gas stations will look like that. “Our kids will say, ‘What’s that, Dad? What’s a gas station?’”

  We turned into a muddy driveway and parked next to the rented ranch house that the company uses for its field headquarters. The yard was lined with shipping containers filled with excavated earth from the mine site. In the backyard shed, core samples covered plywood tables. This is how mining companies determine what they’re sitting on: pull up long cylinders of earth and map the composition of the underground by systematically analyzing each inch of the sample. By the time of our visit they had determined that between ten to fifteen feet of “overmatter” and a bedrock foundation of rhyolite rests a 300- to 360-foot-thick slab of lithium-rich clay known as hectorite. In spots this slab is intercut with stashes of ancient ash that is worthlessly low in lithium, but overall, the numbers are good, with the clay averaging an economically viable 4,000-plus parts per million (ppm) lithium.

  Standing next to the sample-covered tables I talked to Chmelauskas, whose last project was the undeniably less virtuous task of overseeing the construction of the largest open-pit gold mine in China. “Now I wake up every day and I’m saving the world,” he said.

  It’s his job to be this way, but he talked about the impending electric-car revolution like a man who had seen God. Or hell. By which I mean the air quality in China. “When I lived in Beijing, my family had what we called a building index: How many buildings can you see when you look outside?” he said. “Most days it was one.” Two days earlier, during his conference presentation, he had made a similar case based on personal experience. “I was born in 1969, when the population of the world was three billion. Now it’s seven billion. In my lifetime it’s expected to go to nine billion.” Those exploding populations don’t just want to get by; they want to have the same quality of life that we have in the West, Chmelauskas argued. They want to go cruising through the grasslands of Mongolia on vacation. “We’ve got depleting resources, expanding populations, and expanding expectations from those existing populations,” he said. Those factors, along with China’s close brush with death by pollution, are driving the Chinese government to mandate electrification, and in this case, as goes China, so goes the rest of the world. “If China goes electric, GM better have electrics, or they’re not going to sell cars there,” Chmelauskas told me.

  We put on rubber boots and weatherproof jackets, loaded into 4 × 4s, and left for the mine site. We drove west toward the Jackson Mountains, a low range separating the agricultural valley that contains the small town of Orovada from the caldera, the remains of that ancient, fertile volcano. This is antelope country, coyote country, desert bighorn sheep country. The road was smoothly paved, and when we took a right onto a dirt lane, driving only a few hundred yards up a sagebrush-covered hill, I was a little taken aback by the location of the slice of earth that Western Lithium says is capable of supplying the world’s current lithium needs all by itself. It’s a random hill in the empty American West, an unremarkable, sagebrush-covered mound in a relatively scenic bit of American mountain country.

  We took a right on another dirt road. Ahead of us for maybe a quarter mile, to our right and our left, to the top and bottom of this ridge, and then behind us another several hundred yards—that’s where the clay is. Underneath us.

  We stopped at a fresh gash that trucks and shovels had gnawed into the earth and walked down into the trench. It was not violent mining. As promised, the faces on either side of the cut revealed fifteen or so feet of dirt, and then clay. My boots bounced slightly on the clay, as if we were walking on a giant sheet of Play-Doh. Chunks of hectorite lay scattered across the intact clay floor, wet to the touch and roughly the liverine color of the fois gras in last night’s mosaic of milk-fed poularde.

  Western Lithium says this giant clay sponge contains the equivalent of five hundred thousand tons of lithium carbonate, theoretically enough to satisfy the current world demand for four years. Two investors in the company, young brothers running a family fund in San Francisco, milled around beside me. I asked them what they thought. “I like what I’m seeing,” one said. “Other open-pit mines we’ve been to, it looks like they had to move the whole fucking world to get in there.” The other brother: “I see cash flow, is what I see.”

  In two to five years, the ground beneath our feet would be an open-pit mine. If that one isn’t enough, there are four more clay deposits to our north that can be opened up. Earlier I had asked Chmelauskas what the environmental drawbacks to a mine like this would be. He was frank. Mining lithium from clay makes much less of an impact than many other extractive industries—there are no toxic chemicals involved, and no blasting (one person described the method of mining employed here as “gardening”)—but mining is never impact-free. “I mean, we’re going to put a big hole in the side of that mountain,” Chmelauskas said. “But you have to weigh the net costs.” Meaning, yes, we’re going to gut one hill in a remote corner of Nevada, but isn’t that a sacrifice worth making in order to secure a major North American source for the active ingredient in the petroleum-free cars of the future?

  When the mine goes live, the clay from this hill will be crushed, calcined, then mixed into a liquor of sulfates. After that comes the water leach, then the addition of soda ash, and then from that solution lithium carbonate should precipitate out. When the mine is running at full scale, it will produce 27,000 tons of lithium carbonate a year, along with 115,000 tons of potassium sulfate as a by-product. It’ll cost 89 cents a pound to process that lithium, and Western Lithium should make $263 million a year.

  On the flight back to Las Vegas, I sat across the aisle from Oscar Ballivian. I leaned over to ask him whether Bolivia or Western Lithium—two projects starting from essentially the same stage of preliminary exploration—was more likely to start producing first. He answered by listing the many companies he had consulted for since beginning his research at the Salar de Uyuni in the 1980s. Negotiations with the government had never gone far enough to get Uyuni into production. Now, Ballivian said, Morales insists on developing Uyuni himself, in order to keep the Bolivian people from getting robbed, as so many South American people have by so many foreign mining concerns before. There’s a new mining minister, and he might be accommodating, but who knows, Ballivian said. There are many problems. You can see for yourself, if you go down there.

  10

  THE LITHIUM TRIANGLE

  The unaccustomed human brain has a hard time processing the Salar de Uyuni. The closest analogy for this endless expans
e of white substance is the ice sheet covering a frozen lake, and so the first time you drive onto the salar, something deep in the spine warns you that at any moment the surface could split, and you could plunge in.

  The salar, however, is solid, composed of an unfathomably large amount of solid material—forty-seven billion cubic meters of salt and gypsum and brine and mud and fossilized brine-shrimp feces. It is also a sponge for the brine, known in South America as salmuera, that is perhaps the world’s richest source of lithium.

  During the kind of overcast, rainy weather that welcomed me during my first moments on the salar, all recognizable nonsalt landmarks disappear in a fog of white and gray. In every direction, including up and down, there is only the dull white of salt and cloud. Under my feet on the day I arrived at the small and desperate operations of the fledgling Bolivian lithium initiative was a dam made of bulldozed salt, the main wall for a series of evaporation pools. If all goes as planned, one day this pool and others like it will be essential for processing the world’s largest supply of this mineral.

  As I would soon learn, however, it could be exceedingly difficult to make that happen.

  Since Oscar Ballivian published the first rigorous measurements of the Salar de Uyuni’s lithium content in 1981, geologists have known about the rich mineral stash buried beneath the salt. Until recently, however, no one cared all that much, because lithium was a niche product, nothing that could compete in the minds of speculators and investors with the likes of gold, silver, uranium, platinum. In the early 1990s, the American company Lithco attempted to get a mining concession from the Bolivian government, only to be beaten back by resistance from the locals, who even then, when lithium was something hardly anyone ever thought about, were afraid of foreign companies coming in to steal their mineral riches. But only after the announcement of the Chevy Volt and the emergence of the “peak lithium” scare did the frenzy begin. William Tahil’s warning—that Bolivia would become a greater source of world attention than Saudi Arabia had ever been—made an irresistible story, particularly given Bolivia’s long, traumatic history of natural resource exploitation and its fascinating and tumultuous recent politics. Suddenly, starting in 2009, the Salar de Uyuni was in the news—in The New York Times, in Le Monde, on ABC, the BBC.