Oil

Bolivia taps Chinese battery giant CATL to help develop lithium riches

By Daniel Ramos

LA PAZ, Jan 20 (Reuters) - Bolivia has chosen a consortium including Chinese battery giant CATL 300750.SZ to help develop the South American country's huge, but largely untapped, reserves of lithium after a lengthy bidding process involving firms from the United States and Russia.

The deal announced at an event in the political capital La Paz would see the CBC consortium partner on direct lithium extraction from the country's Potosi and Oruro salt flats.

The agreement could help finally unlock Bolivia's huge potential as a supplier of lithium for batteries needed to power the global shift to electric vehicle, although projects to mine the ultralight metal take many years and doubts remain around the direct extraction technology being used.

Bolivia's iconic salt flats are home to the world's largest lithium resources at 21 million tonnes, according to the U.S. Geological Survey, but the country has almost no industrial production or commercially viable reserves.

Bolivian President Luis Arce said CBC would invest over $1 billion in the project's first stage, boosting infrastructure, roads and conditions needed to start up plants the country hopes will one day produce lithium cathodes and batteries.

He added that talks were ongoing for potential partnerships with other foreign firms. The companies who have remained in the race include U.S. firm Lilac Solutions, Russia's Uranium One Group and three other Chinese bidders.

"Today begins the era of industrialization of Bolivian lithium," Arce said, adding that there was "no time to lose" in developing the metal. The price of battery-grade lithium reached close to $85,000 a tonne toward the end of 2022.

Energy minister Franklin Molina said the move showed there were "sovereign alternatives to the privatization models of lithium exploitation." Bolivia state firm YLB is set supervise and take a central role in the project.

(Reporting by Daniel Ramos; Writing by Sarah Morland; Editing by Mark Porter)

((sarah.morland@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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