Last week, Bolivia picked a consortium that includes China’s battery giant CATL to develop its largely untapped lithium reserves.
A report by Reuters said the deal would see the consortium partner direct lithium extraction from Bolivia’s Uyuni and Oruro salt flats.
The partnership would give the CBC consortium the right to develop two lithium plants that can produce up to twenty-five thousand tons of battery-grade lithium carbonate each annually.
Lithium is needed to produce virtually all traction batteries currently used in electric vehicles as well as consumer electronics. Lithium-ion (Li-ion) batteries are widely used in many other applications as well from energy storage to air mobility.
Speaking on Friday’s deal, Bolivian President Luis Arce said that the CBC consortium would invest more than one billion dollars in the project’s first stage to boost infrastructure, roads, and conditions required to start the lithium plants that the country hopes will one day produce lithium cathodes and batteries.
“CBC will make an investment of more than one billion dollars in the first stage,” he said. “One billion dollars that will help improve electric energy at the places where it will be established, roads, basic services, conditions for the constructions of the plants that will produce the lithium cathodes and batteries.”
“Today begins the era of industrialization of Bolivian lithium,” Arce said, adding there was no time to lose in developing the metal. The President also said that talks were ongoing for potential partnerships with other foreign firms.
China to exploit world’s largest lithium resources
As per the US Geological Survey, Bolivia’s salt flats are home to the world’s largest lithium resources at twenty-one million tons.
Experts say that satisfying world demand for lithium will not be a trivial problem. Despite COVID-19’s impact on the automotive sector, electric vehicle (EV) sales grew by around fifty percent in 2020 and doubled to approximately seven million units in 2021.
At the same time, surging EV demand has seen lithium prices skyrocket by around 550 percent in a year. By the beginning of March 2022, the lithium carbonate price had passed $75,000 per metric ton, and lithium hydroxide prices had exceeded $65,000 per metric ton compared with a five-year average of around $14,500 per metric ton.