Following a meeting with CATL executives on Sunday, Bolivian President Luis Arce confirmed the commitment to build two lithium plants to extract minerals from the country's Uyuni and Oruro salt flats.

Construction of both plants could begin as soon as Q3 2023, with investment climbing to almost US$10Bn during the project's industrial process. The total investment is put at US$1.4Bn, with the possibility of further investment under evaluation.

In January 2023, the Bolivian government, via Bolivia's state-run lithium company, Yacimientos del Litio Bolivianos (YLB), selected a consortium including CATL and CMOC to develop its lithium reserves after a protracted bidding process.

The consortium, named CBC, is set to focus on developing direct lithium extraction (DLE) technology to extract lithium from the Uyuni and Oruro salt lakes. CBC also has the rights to develop two lithium plants, each with 25ktpy battery-grade lithium carbonate capacity.  

Project Blue believes the consortium will face several key challenges with regard to project development. These challenges include technological development, local social resistance, a limited legal framework, and political pressures, including an ambition to manufacture lithium-ion batteries in Bolivia by 2025. DLE technology is proprietary and unique by nature, with each flowsheet having to be tailored to a resource based on its lithium and, often more importantly, its impurity content. In recent years the lithium sector has seen examples of DLE operations and projects struggling to achieve targeted recovery rates, product quality, and viable production volumes.

Despite previous efforts by German, Japanese and Chinese groups to develop its lithium resources, Bolivia has previously struggled to make significant strides in developing its lithium resources, largely as a result of local political issues and difficulties in developing processing technologies for the brines. Despite these past challenges, the continued strong interest in Bolivia’s lithium resources highlights the growing concerns of investors and governments over accessing future lithium resources. Investors are increasingly willing to take on capital risk when it comes to securing reliable sources of lithium and, historically, China often has more appetite for investing in riskier jurisdictions.

Bolivia has abundant lithium resources at the Salar de Uyuni, with the USGS reporting countrywide resources at 21Mt in 2022. However, the country has not managed to produce lithium at a commercial scale unlike its “lithium-triangle” neighbours Argentina and Chile. Bolivia’s Government has long hoped that a private sector partner can help develop its lithium riches and last year narrowed the candidate list from eight to six, disqualifying US-based Energy X and Argentina’s Tecpetrol. This left six firms in the running: four from China (CBC, Fusion Enertech, TBEA and CITIC Guoan Group), one from Russia (Uranium One) and US start-up Lilac Solutions (backed by BMW, and Bill Gates’s Breakthrough Energy Ventures).

The selection of the CBC consortium placed more South American lithium resources in Chinese control as the international scramble for lithium continues. Other examples include Ganfeng via its involvement in the Cauchari, Mariana, Incahuasi and Sal de la Puna (SDLP) lithium brine projects, all in Argentina, along with Tianqi’s 28% shareholding in Chile’s SQM, and Zijin Mining Group ownership of the Tres Quebradas (3Q) project in Argentina.