The Bolivian government has chosen a consortium including CMOC and CATL to develop its lithium reserves after a protracted bidding process.

The new consortium, named CBC, will focus on developing direct lithium extraction (DLE) technology to extract lithium from the country's Uyuni and Oruro salt flats.  CBC also has rights to develop two lithium plants each with 25ktpy battery-grade lithium carbonate capacity.  The consortium will invest over US$1Bn in a first phase.

Project Blue believes this is a positive step for CMOC and CATL, though it is likely 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 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.

Bolivia has abundant lithium resources in its 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 successful bid by CBC places 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.

For the reasons outlined above, Bolivia has previously struggled to find stakeholders willing to become involved in developing its lithium resources, as a result of local political issues and other jurisdictions offering more favourable conditions for investment. Despite these past challenges, the continued strong interest in Bolivia’s lithium resources highlights the growing concerns of investors and governments over access the future lithium resources over the next decade. 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.