LA PAZ (Reuters) - Bolivia has chosen a Chinese consortium to be its strategic partner on new $2.3 billion lithium projects, the government said on Wednesday, giving China a potential foothold in the country’s huge untapped reserves of the prized electric battery metal.
China’s Xinjiang TBEA Group Co Ltd will hold a 49 percent stake in a planned joint venture with Bolivia’s state lithium company YLB, the Bolivian firm said.
Together, the companies will seek to produce lithium and other materials from the Coipasa and Pastos Grandes salt flats.
Bolivia estimates that development of the projects will cost at least $2.3 billion. The Chinese firm will provide initial investment and YLB will pay its share with future lithium production, YLB’s executive manager Juan Carlos Montenegro said by phone.
Bolivia has some of the world’s largest reserves of lithium - a key component in batteries that power electric cars - but has yet to produce the metal at a commercial scale.
The preliminary deal gives Beijing a fresh chance at locking in access to Bolivia’s lithium after German firm ACI Systems GmbH was chosen last year as partner on the country’s largest lithium deposit in the salt flats of Uyuni.
Xinjiang TBEA beat six rivals that also sought to partner with Bolivia on Coipasa and Pastos Grandes, including ACI, Uranium One - a subsidiary of Russia’s state nuclear company Rosatom - and the Irish company Clontarf Energy Plc.
“Why China? There’s a guaranteed market in China for battery production,” Bolivian President Evo Morales said in broadcast comments at a signing ceremony in the highland city of Oruro.
China, the biggest global consumer of lithium, will need 800,000 tonnes of the metal per year by 2025 to support its booming electric car industry, China’s Ambassador to Bolivia Liang Yu said at the same event, hailing the deal as “historic.”
There are no estimates yet for how much lithium Coipasa and Pastos Grandes hold. Bolivia said last month that a new study found that Uyuni likely has at least 21 million tonnes of lithium, more than double a previous estimate.
Despite its abundant reserves and growing global demand for the metal, Bolivia’s state-led plans to industrialize its lithium have faced repeated delays.
The next steps on Coipasa and Pastos Grandes will be to conduct feasibility studies, YLB said.
“This investment is not going to happen in a year. It’s a long process of several years,” Bolivia’s Deputy Minister of High Energy Technologies Luis Alberto Echazu said.
YLB added that it might partner with Xinjiang TBEA on a lithium battery plant in China.
Reporting by Daniel Ramos, additional reporting and writing By Mitra Taj, editing by Rosalba O'Brien