Bolivia walks away from lithium project with German company

Bolivia’s government has cancelled a joint venture project with Germany’s privately owned ACI Systems Alemania (ACISA), which was seeking to develop a massive lithium project in the country’s southern highlands.

Residents of Potosí, where the partners had planned to build a factory for electric vehicles (EVs) batteries and a lithium hydroxide plant, have been protesting since early October against the project. They claimed the region was not getting enough benefits from the deal and demanded authorities to raise the agreed 3% royalty to 11%, Spanish news agency EFE reported.

Potosí authorities said the decision followed a decree emitted
by President Evo Morales over the weekend in which he overturned a previous order
permitting the $250 million lithium operation.

Based in Zimmern ob Rottweil, a rural village at the heart of Germany’s Black Forest, ACISA is a subsidiary of ACI Group, which provides project-management support to the photovoltaic, battery and automotive industries.

The company, which employs about 20 people, was created solely to focus on building the now botched lithium mine in the Salar de Uyuni and had committed a $1.3 billion investment.

Demand for the white mineral is expected to more than double
by 2025. The soft, light commodity is mined mainly in Australia, Chile and
Argentina.

Bolivia is sitting on the second-largest reserve,
estimated in nine million tonnes, or around 25% of the world’s known reserves.
But so far it has done nothing with it.

Lithium contained in Bolivian salt flats are higher in
altitude, not as dry, and contain more magnesium (Mg) and potassium than in
neighbouring Chile and Argentina, making the extraction process much more
complicated and costly.

Uyuni’s higher rainfall and cooler climate mean that its
evaporation rate is not even half that of Chile’s Salar de Atacama, where brine
ponds evaporate quickly.

A lack of infrastructure and investor confidence in the Bolivian government are other issues negatively affecting Morales’ hopes for a developed lithium industry.