Bolivia, the country with the largest national lithium reserves in the world, has invited international companies to participate in the industrialization of lithium extraction alongside the state. In practice, the most significant contracts have been signed with Russian and Chinese companies.
Bolivia’s reserves are estimated at around 23 million tons, accounting for 30 percent of the world’s known reserves, according to industry data. Lithium, often referred to as “the new white gold,” is used in the production of batteries for electric vehicles (EV).
The Bolivian government is aligned with Cuba, Venezuela, and Nicaragua.
Bolivia, Chile, and Argentina form the so-called “Lithium Triangle,” as together they hold the world’s most significant reserves, or a decisive percentage of the known global supply, estimated to range from 68 percent to 80 percent, according to various sources.
Morales nationalized lithium reserves in 2008
The Plurinational State of Bolivia nationalized lithium in 2008 under the administration of Evo Morales. Law No. 928 established the State’s absolute control over lithium and its exploitation. The strategic public company Yacimientos de Litio Bolivianos (YLB) was created for this purpose.
Last September, YLB signed an agreement with Russia’s Uranium One Group “for the construction of a direct extraction and lithium carbonation plant, expected to produce 14,000 tons annually” of lithium carbonate, EFE reported from La Paz.
The president of YLB, Omar Alarcón, and the representative of Uranium One Group, Larisa Lysova, signed on behalf of their respective parties in a ceremony that was also attended by Bolivian President Luis Arce and the Minister of Hydrocarbons and Energy, Alejandro Gallardo.
Uranium One Group is one of the largest companies worldwide, dedicated to the exploitation of minerals for the energy sector, with extensive experience in the use of modern and efficient extraction, purification, and marketing technologies, according to information on YLB’s website.
This has been the first firm contract with a foreign company for direct extraction, an investment estimated at $970 million.
A plant is projected to be built in the town of Llipi, in the Salar de Uyuni, the largest lithium deposit in Bolivia and the world, covering approximately 10,000 square kilometers, within a period of 30 months. The agreement still needs to be approved by the Legislative Branch.
The direct lithium extraction (DLE) technology to be used, according to authorities, enables a recovery of more than 80 percent of the raw material. The evaporation pond method used by YLB only allows a recovery of 12 percent; this technology, developed by YLB with an investment of $930 million, has yielded very poor results.
The price of lithium is currently set at $47,250 per ton, although it reached a peak of $74,475 per ton in October of last year.
The Chinese take position
On November 26th, the government formalized another major contract with the Chinese company Hong Kong CBC Investment Limited, which plans to build two direct lithium extraction (DLE) plants in the Salar de Uyuni, with a total investment of approximately $1,030 million.
The contract was signed by the head of the state-owned company Yacimientos del Litio Bolivianos (YLB), Omar Alarcón, and the legal representative of CBC, Chunsheng Ma, during a ceremony at the government headquarters in La Paz, attended by President Arce and the Minister of Hydrocarbons and Energy, according to local press reports.
The agreement formalizes a previous one from January 2023. CBC is a subsidiary of none other than the Chinese CATL, Contemporary Amperex Technology Co., Limited, the world’s largest producer of lithium batteries for vehicles.
CATL supplies batteries to the Tesla plant of billionaire Elon Musk, who is now a close advisor to elected President Donald Trump, in Shanghai. It has also granted production licenses to Ford for a new plant being built in Michigan, according to Reuters.
The agency’s report, dated November 13, 2024, states that the Chinese giant is considering building a lithium battery production plant in the United States if Trump allows it. Although the plans are not new, CATL backed down due to the opposition of President Joe Biden’s administration.
Chinese companies are responsible for processing and refining nearly two-thirds of the lithium produced globally, according to the digital platform The Diplomat.
Regarding the agreement with the Chinese, President Luis Arce explained that “the contract consists of two parts: one for a plant that will produce 10,000 tons of lithium carbonate annually using residual brine, with EDL technology and an investment of 310 million dollars,” according to the Swissinfo.ch website.
The company will also build another plant with a production capacity of 25,000 tons, which will also apply EDL technology, with an investment of 720 million dollars.
Contracts “very beneficial” for Bolivia
Arce assured that the contract is “very beneficial” for Bolivia, and now it is up to the deputies to approve it, according to Swissinfo.ch.
However, CATL’s operation carries the shadow of labor abuses and human rights violations. A significant portion of the lithium processing plants in China are located in the Xinjiang Autonomous Region, where the local Uighur population is subjected to forced labor, detentions, and other serious human rights abuses, according to international organizations.
On the other hand, the Bolivian opposition argues that the contract with the Chinese violates Law 928, as only the state can participate in extraction; foreign companies are only allowed to participate in processing.
In any case, one fact is clear: China and Russia have taken the lead in Bolivia in the global race for control of lithium and its production.