China’s CBC investments is a subsidiary of Contemporary Amperex Technology Co., Limited (CATL), a Chinese battery manufacturer. Credits: GettyImages/Anadolu

Bolivia’s government has signed a $1b deal with a subsidiary of CATL, one of the world’s largest lithium producers, to build two direct lithium extraction plants in the Uyuni salt flats.

The government’s lithium company YLB will work with the Chinese consortium CBC to develop the plants in Bolivia’s southwestern region. YLB will have a 51% stake in the projects.  

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“This service contract will develop a final design for engineering, construction, operation and maintenance of a plant that will produce 10,000 tons of lithium carbonate per year and another plant producing 25,000 tons of battery-grade lithium carbonate per year,” Omar Alarcon, the head of YLB, announced at a press conference.  

Alarcon said that plants will produce 35,000mt of lithium per annum.  

Demand for lithium is set to keep rising, as it is one of the critical minerals vital to green transition technologies such as electric vehicles (EVs) and batteries.  

Bolivian has never managed substantial production of lithium in the past, despite having the biggest reserves in the world.  

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Mismanagement, environmental costs, and political stability are some of the reasons the country hasn’t realized its dream of mass lithium industrialisation.  

In September, the government signed a contract with Russian mining company Uranium One Group to build a nearly $1b plant.  

Both deals need approval from Congress, where Bolivian President Luis Arce’s party is fractured and lacks a majority.  

The announcement comes as fears over Chinese influence in Latin America remain high. While attending the APEC Summit a few weeks ago, China’s President Xi Jinping inaugurated Peru’s Chancay mega port, a project funded through the Belt and Road Initiative.