Germany is hoping to engage Bolivia’s next government in talks over a scrapped joint venture deal to develop the South American country’s massive lithium reserves, as members of its car sector struggle to meet electric vehicles (EVs) production targets due to a supply shortage of battery cells.
Both nations signed a lithium partnership in 2018 following three years of intense lobbying from Berlin, which said a small privately-owned company from Germany was a better bet than its Chinese rivals.
Bolivia’s state-owned lithium
company YLB and Germany’s ACI System planned to install four lithium plants in
the Salar de Uyuni salt flats, which hold the world’s second-largest
lithium deposit.
The joint venture was also going to
build a factory for EV batteries in the country, which is sitting on about
nine million tonnes of lithium, or around 25% of the world’s known reserves.
The deal, however, was cancelled in
November following locals’ protests and a change of leadership at YLB following
president Evo Morales resignation.
Morales had fled Bolivia earlier in
the month after losing the support of the military and police amid widespread
protests over a disputed election. His supporters say he was the victim of an
orchestrated coup. Opponents argue he was forced from power after manipulating
the constitution to run for a fourth term in office then seeking to win that
vote with electoral fraud.
Bolivians will choose a new
president May 3 and Berlin is closely following related developments as the
cancelled venture is considered vital for the German auto industry’s plans to
develop electric batteries.
The new head of YLB, Juan Carlos
Zuleta, said last week the deal would not be revived, adding that the state-owned
company planned to apply strict limits to foreign investment in the extraction
and processing of the key element for the production of the batteries that
power EVs and smart phones.
Zuleta, however, doesn’t seem fully
opposed to letting foreign companies as he noted that a similar deal with China’s
Xinjiang TBEA was being reassessed. He also hinted recently that Tesla should
be considering building a plant in Bolivia.
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 wants to strengthen local
know-how and become a producer, but its lithium is found at higher altitude 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.
Germany’s push comes as some of its key auto industry actors are beginning to show signs of distress. Manager Magazin reported on Thursday that Daimler has been forced to reduce its 2020 production targets for the Mercedes-Benz EQC EV to 30,000 from about 60,000 due to a supply shortage of battery cells from LG Chem.
Daimler expected to sell around
25,000 EQC vehicles last year, but was only able to build around 7,000, the article
said.
German Economy Minister, Peter Altmaier, has urged local industries to secure raw materials for electric batteries to reduce dependence on Asian suppliers.