Bolivia chooses Chinese consortium led by CATL for $1 billion lithium investment

Bolivia selected China’s largest battery producer CATL and largest cobalt miner China Molybdenum to help develop its giant lithium resources, in a step forward towards production after three decades of failed attempts.

The country’s state-owned producer Yacimientos de Litio Bolivianos (YLB) said the group would invest around $1 billion to build plants to produce lithium using Direct Lithium Extraction (DLE) in the Salar De Uyuni and Salar de Coipasa.

The consortium, which also includes CATL’s recycling subsidiary Brunp, will produce 25,000 tonnes of battery-grade lithium carbonate by 2024 and 100,000 tonnes by 2028, using direct lithium extraction (DLE) rather than large evaporation ponds.

CATL will hold 66% of shares in the entity, which is called CBC.

“Bolivia’s world leading lithium resources are vast and unquestionable,” Simon Moores, chief executive of Benchmark, said. “But to turn this into reserves that can be extracted processed into the right grade and used in EVs around the world is no easy feat.”

Bolivia has struggled to commercially produce lithium, falling behind Chile and Argentina and missing out on a record-breaking price rally over the past two years. The country’s president Luis Arce, who was elected in 2020, has promised to back new technologies that promise more efficient extraction to try to catch up.

Bolivia originally selected eight companies to test its brine, which is high in impurities such as magnesium, and last year selected six to move forward. These included Citic Guoan, Xinjiang TBEA Group, Fusion Enertech, Uranium One from Russia, and Lilac Solutions from the US.

While the country’s brine is more difficult to extract than that found in Argentina or Chile, due to the impurities, Chinese companies have a lot of processing experience and technical skills, Ricardo Morales, consulting director for Benchmark, said.

“If anyone can do it it’s China,” he said.

The agreement comes after a more than 700% increase in prices for battery-grade lithium carbonate in China over the past two years, which has put pressure on leading battery producers such as CATL.

CATL’s quest for lithium

For CATL, the deal is a way of securing future lithium supplies it needs to maintain its market-leading share in the battery market.

Chinese companies face increasing difficulties securing lithium resources, following Canada’s decision in November to force Chinese companies to divest from three Canadian-listed lithium companies.

In 2021 CATL made a bid for Argentina’s Millennial Lithium but lost out to Canadian lithium producer Lithium Americas. Since then the company has invested in production of lithium within China.

CATL is also the second largest shareholder in CMOC, which is the second largest producer of cobalt behind Glencore.

Benchmark will provide further insight into lithium market developments in our free to attend webinar on Thursday 2 March – Lithium: The Multi-Billion Dollar Question.

Our experts will be analysing the drivers behind recent price volatility, as well as critical factors impacting the long term outlook, including supply, demand, costs, investment and more.

To secure your place at this webinar, please register with your business email address – personal email registrants will need to be verified by our team.