Bolivian court pauses Chinese, Russian lithium deals

[Redator]

Bolivia’s plans to emerge as a major lithium producer have hit an impasse after a local court ordered the suspension of two major extraction deals signed last year valued at more than $2 billion, according to media reports.

The contracts were signed in 2023 and 2024 respectively with China’s CBC consortium, which includes battery manufacturer CATL, and Russia’s Uranium One Group, a subsidiary of state nuclear firm Rosatom, as revealed by various publications including Bolivia-based El Deber.

The deals aimed to establish direct lithium extraction (DLE) facilities in Salar de Uyuni in southwest Bolivia. The salar is host one of the world’s largest lithium reserves, and forms part of the larger Lithium Triangle shared with Chile and Argentina.

The suspension order was issued last week by a mixed court of Colcha K, a village located in the Potosí region, after a legal complaint was filed by Indigenous groups arguing that the projects had violated their environmental rights and were allowed to proceed without formal consultation.

Both projects have yet to receive legislative approvals but had already initiated preliminary activities on-site, which the local group claimed were conducted without proper authorization or environmental assessments.

35,000 tonnes

Yacimientos de Litio Bolivianos (YLB), Bolivia’s state-owned lithium company, holds a 51% stake in the two ventures. Together, the proposed plants are expected to produce 35,000 tonnes of lithium carbonate a year, Omar Alarcon, head of YLB, said in a press conference last year.

As reported by the Argentine paper Infobae, the court ruling will prohibit YLB as well as the Ministry of Hydrocarbons and Energy, from undertaking any administrative or operational steps related to the contracts until the judicial process is concluded.

However, the Bolivian government has maintained that it has yet to be formally notified of the court ruling, and insists that until official communication is received, the legislative process surrounding the contracts will continue.

Ministers’ response

Álvaro Arnez, vice-minister of Alternative Energies, in a statement to El Periódico de la Energía, brushed aside allegations that unauthorized exploratory operations were already impacting local water availability.

Meanwhile, Minister of Economy Marcelo Montenegro dismissed the ruling as a “politically motivated obstacle to regional development.”

In addition to the environmental concerns, questions have also been raised regarding the financial and operational responsibilities assigned to the Bolivian state. For instance, the Uranium One contract obliges YLB to repay all construction and exploration costs, despite the Russian partner having no obligation to operate the plant, according to Fundación Milenio, a think tank.

The court order underscores the ongoing political instability that continues to hinder Bolivia’s efforts to develop its vast lithium reserves, which the government estimated at 23 million tonnes in a study.