Carlos Ramos, president of Bolivia's state-owned lithium company, signed the historic agreement in January with his counterpart from Chinese giant CATL, the world's largest battery maker. In theory, he will start up, after a long wait, the production of lithium in the enormous Uyuni salt flat in the department of Potosí, the world's largest deposit of this crucial metal for the energy transition. With 21 million tons of lithium in the salt flats of southern Bolivia, and prices around $80,000 a ton, Ramos manages a "white gold" mine for the Bolivian state. But geopolitical tension between the US and China may complicate the plan.
The agreement with CATL will theoretically allow the production of lithium carbonate that will be exported to plants in China to make batteries. It will mean spectacular income for the Bolivian state if the current price of lithium is maintained. But do you still want to create a longer national chain of industrialization, cathodes, batteries, even vehicles?
The agreement with CATL to manufacture lithium carbonate is the first step. The issue of batteries is very complex and difficult, so we will focus the first effort on regional demand, Brazil, Argentina, Chile and Mexico. Let's do it in stages. As soon as we close the carbonate deal with CATL, we are going to launch tenders for the production of cathodes and batteries.
But is it viable to manufacture batteries in a country like Bolivia?
We are going to make it. believe me. I am not going to tell you that we are going to compete with the Chinese in the manufacture of batteries on a global scale, but focusing on it as a regional issue, as a regional development issue, in that aspect we can achieve that synergy and be able to be regional battery producers. And this, in the end, benefits the country. I see Bolivia with its lithium potential as one of the first Latin American countries to enter the energy transition of fossil fuel combustion vehicles. We are looking for more partners. We have lithium; they have the technology. We can make a very interesting synergy. We are already looking for partners to produce cathode. This has a lot of added value and would be a fundamental step for the construction of lithium batteries.
CATL is a company specialized in the manufacture of batteries with little knowledge of mining. Will it be a good partner for technology transfer and development of new direct lithium extraction technology?
They build the plant and transfer concept, development and technology. CATL has partners who use patents; a branch of his corporation is dedicated to it. As the world's largest consumer of batteries, it's a very interesting partner and gives us market certainty. If they fail, we fail. And if we fail, they will be hit hard because they need the resources.
And this method of direct extraction of lithium in theory, from an environmental point of view, can be more desirable, right?
Yes. It implies less environmental impact. We don't need to extract large amounts by evaporation from the lithium pools, it's a straightforward job. The brine is recovered afterwards. It is true that, over time, this will perhaps cause a decrease in the amount of lithium. But that won't be important. We are very conscious of the environment and tourism in the salt flat. We don't want to harm them.
The United States, including the military in the Pentagon, has expressed fears about the deal because of China's growing influence on lithium extraction...
YLB's decision is business. Of course, it is a strategic resource of no small importance. We understand the concerns of other countries regarding what can happen internationally; but we are doing responsible work for Bolivia. In any case, we will diversify the risk. It's not just going to be Chinese companies. We are not going to depend on a single technology.
Could it be that a contract is signed with a US company in other salt flats?
If it can be. There are several salt flats and we have to develop the chain. But keep in mind that the sovereignty of the country comes first. Bolivian mining law is strong. We must take care of the natural resources that are property of the state. CATL agreed to work with those conditions; the other companies have to adapt to this as well and respect Bolivian sovereignty.
Perhaps Chinese companies, motivated by the need to guarantee their supplies in the long term, with less interest in short-term benefits, are the most suitable for a project like this and more willing to adapt to this law that defends Bolivian sovereignty. in resources such as lithium. Could be?
The decision to sign with CATL is the result of a technical selection and evaluation process. It has not been political. But we have been clear and emphatic from the beginning: the sovereignty of the country comes first. CATL accepted this. The property of the lithium is of the state; No other kind of business investment can be accepted because the law does not allow it. The good thing is that with the state the investment can be long term.
With current lithium prices it would be easy to think that this is going to be something of a bonanza. Is there a danger of opting for immediate income from the sale of lithium carbonate and not betting on the future and industrialization?
The risk always exists. You have to invest in things and elements that generate real development for the Bolivian population with improvements in education and health. We do not want or think that lithium is the only source of income. We know that at some point, revenue may decline due to international market prices. We do not want to be forever dependent on lithium Of course, our lithium deposits are not going to run out for a long time. Having said all this, according to expert studies, we have a limited window of time in which if our lithium, the key resource for the energy transition, is not used, they will look to another. So it is obvious: we must take advantage of this window
What are the production goals?
Well, our plan is to be producing approximately 40,000 tons of lithium carbonate per year by 2025 with the first two plants built by CATL. And with the possibility of implementing three more plants by other companies, we will be able to produce at least 100,000 tons in 2030. With prices as they are, we are talking about important, very important income.
If there is any place on the planet that symbolizes the danger behind the bonanza of raw materials, it is Potosí. And obviously the people of Potosi are aware of this and that is why they demand better royalties to invest in the development of the region, beyond lithium. How will this be resolved?
I am from Potosí and I know the history of Potosí very well. I know very well the feeling of the people of Potosi regarding their raw materials. You have to be very aware to know how to focus that economic boom. We have to define what development means for us because we could end up using those resources for things that may not be important in the medium term. It is important to carry out an analysis to define what is going to be done with the income from royalties. The San Luis Potosí civic committee and various institutions are concerned about how much they will get from royalties. But we don't even have a production plan yet! I have been clear with them: we need a balance. We need the development of Potosí but that does not impede the industrialization of the country. YBL is a resource generator... How are the resources allocated? How is it spent? How are these resources invested? This passes through the responsibility of the authorities at that time. It goes through the government, the municipalities... We are a technical production company. Our mission is to produce lithium and generate resources. Beyond that, the responsibility for development, what has to be done with this income, passes through the sovereign decision of the people.
Do you think there are people in Potosí who want to exploit this issue to achieve their own political ends?
Completely. There are people and institutions that want to generate development and achieve a production that generates income, as in the case of YLB, but there are also elements that want, as you say, to instrumentalize to jump into a political arena, into a political scenario. This already happened in 2019 (the year in which the leader of the postino civic committee, Marco Pumari, participated in the coup against Evo Morales). But now there is a difference: the conditions have changed. We have done a very intense job of socializing information. Now we know the needs of the international market in the use of lithium and why we must produce it. If we don't do it now, we're going to be left with lithium that won't be worth anything if we don't take advantage of this market opportunity that the world is presenting to us. That is why I think that the communities in Potosí are calmer, because it is also showing that responsible and serious work is being done. The industrialization strategy is very solid.
