Bolivia has announced a $1bn agreement with China’s CBC, a subsidiary of battery giant CATL, to establish two lithium carbonate plants in the Uyuni salt flats. This latest move, revealed on November 26, aims to elevate Bolivia's role in the global lithium market despite its history of struggling to exploit its vast reserves.

The plants, expected to produce a combined 35,000 metric tonnes of lithium annually, will use advanced direct lithium extraction (DLE) technology, enabling faster and more environmentally friendly production. Bolivia’s state-owned company YLB will maintain a 51% stake in the project, ensuring the nation retains control over its resources.

President Luis Arce described the deal as a milestone in Bolivia’s journey to becoming a global lithium leader, emphasising its potential to influence international lithium pricing. However, this ambition comes against a backdrop of political and logistical challenges. Parliamentary approval is required, and Bolivia’s fractured legislature could delay progress, particularly with elections looming in 2025.

This deal follows a $976mn agreement signed earlier this year with Russia’s Rosatom-owned Uranium One Group, which also focuses on DLE technology. The Russian partnership aims to produce 14,000 tonnes of lithium annually.

Last year, Uranium One, along with CBC and Citic Guoan Group, were chosen to set up pilot DLE plants in Bolivia, which were expected to expand to industrial-scale operations over time. The Bolivian government has set a target of exporting 50,000 tonnes of lithium carbonate equivalent each year

Relying heavily on Chinese and Russian investment poses risks to Bolivia's long-term economic and geopolitical stability. While these partnerships provide immediate funding and advanced technology, they may limit Bolivia's leverage over its resources and tie it to the strategic interests of these nations. This dependency could lead to unfavourable terms, such as reduced local benefits or limited technological transfer, undermining Bolivia’s sovereignty over its lithium industry.

Bolivia’s position as home to the world’s largest lithium reserves—estimated at 23mn tonnes—has long been seen as an untapped opportunity. Despite this advantage, the country has lagged behind neighbours Chile and Argentina in production. Infrastructure gaps, regulatory hurdles, and political instability have stymied progress, leading to scepticism among investors.

Since the 1990s, the nation has struggled to develop its industry, hampered by bureaucratic red tape and logistical obstacles. To move forward, companies must navigate complex environmental regulations and obtain approval from the legislative assembly, which may be difficult given the country's political fragmentation and upcoming 2025 general elections.