China and Russia will invest a total of $1.4 billion in lithium projects in Bolivia, a South American nation with vast reserves of the metal crucial for batteries to power electric vehicles, the government said on Thursday. China’s Citic Guoan and Russia’s Uranium One Group, both with solid state participation, will partner with Bolivia’s Yacimientos de Litio Bolivianos (YLB) to install two lithium carbonate plants, President Luis Arce said at a public event. The deal, completed by 2028, will help unlock Bolivia’s potential as a producer of the white metal needed to boost global energy efficiency and move away from fossil fuels.
But despite high demand and soaring prices that have jumped 10-fold since 2020 to almost $85,000 per tonne, Bolivia has barely scratched the surface of its mineral riches. The US Geological Survey estimates the Andean country has 21 million tonnes of lithium, a figure dwarfed by the world’s top supplier, Australia, with 34 million tonnes.
The YLB partnership with CBC will build and operate the two lithium carbonate plants, the first step in a long-term plan to industrialize Bolivia’s vast salt flats. Each plant will produce 25,000 metric tonnes of the material annually, enough to make some 5.5 million EV batteries a year. The company, which includes battery giant Contemporary Amperex Technology Co Ltd (CATL), its recycling subsidiary BRUNP and mining firm CMOC, has set an ambitious target to begin production in 2025.
But the company could face challenges in achieving its goal. Andy Leyland, the founder of EV battery supply chain consultancy SC Insights, says local resistance and changes in leadership have stopped other lithium projects in Bolivia before. And he warns that the country needs to strike licensing and profit-sharing deals with battery producers, which may run into difficulties in light of Bolivian law that dictates mineral reserves must stay in state hands.
Bolivia’s government is eager to take a more active role in lithium development than it did in past decades when foreign investors scooped up the resources and left. It has pushed to ensure that the industry will benefit local communities, including those living in Potosi, the city at the heart of the Andean country’s mining history. It also wants to ensure that a large portion of profits is redirected back into the mining areas for infrastructure, education, and healthcare. But the initiative faces several obstacles, including opposition from locals over the environmental and social impacts of extraction. The Bolivian government has promised to address those concerns as the project progresses. It has started consultations with indigenous groups and is planning a national consultation process in the second half of this year. It also seeks to clarify how the project will proceed, with details due to be announced in July. Reuters’ Claudia Torres contributed to this report.
