Despite having one of the lowest GDP per capitas in Latin America (approximately US$3,378/y), Bolivia
is blessed with some of the most lithium reserves in the world, one of the principal raw materials needed to build lithium ion batteries for the growing popularity of electric vehicles (EV) today.
Although lithium is abundant worldwide, only a few countries have large quantities of it. While Australia has some 40% of the world's supply, the South American tri-country region of Argentina, Bolivia, and Chile has approximately 50%.
Due to favorable trade policies, Chile is usually the first choice for those who want to invest in the lithium industry but Bolivia's President Evo Morales has recently prioritized the lithium industry, seeking foreign investment in the sector.
In fact, the country has recently chosen a Chinese consortium to be its strategic partner on some US$2.3 billion in lithium projects.
China’s Xinjiang TBEA Group will hold a 49% stake in a joint venture with Bolivia’s state lithium company YLB, the latter said, stating that the two will produce lithium and other materials from the Coipasa and Pastos Grandes salt flats.
The preliminary deal gives Beijing a chance at Bolivia’s lithium reserves shortly 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.
Although there are no estimates as to how much lithium Coipasa and Pastos Grandes hold, a new study has found that Uyuni likely has at least 21 million tonnes of lithium, more than double a previous estimate, Reuters said in a report.
salt flats of Uyeni (source: Shutterstock)
“This investment is not going to happen in a year. It’s a long process of several years,” says Bolivia’s High Energy Technologies Deputy Minister Luis Alberto Echazu.
Meanwhile, YLB is looking into the possibility of partnering up with Xinjiang TBEA on a lithium battery plant in China, the report said.
However, if this does not occur, the extraction of lithium and the reaping of economic benefits from this exctraction will depend on exports to other countries as EV usage in Bolivia is still a few years away.
EV in the country may not flourish for another five years or so and the main hurdle, according to Bolivia's energy foundation director Miguel Ángel Fernández, is their cost, something that could be curbed by the approval of government policies aimed at encouraging EV usage.
Although the country does face low GDP output, its inflation is just under 2% and its benchmark interest rate was 3.13% at the end of 2018 so its economy is not that bad considering some of its South American neighbors.
In the end, a boost from the lithium industry would likely be well received by the upcoming government. Bolivia will have presidential elections in 2019 and President Evo Morales has been chosen by his party to run for another term.