CITIC signs agreement with Bolivia for tapping lithium

Suppliers | AC | August 31, 2011 at 6:03 pm

CITIC Guoan Group, a conglomerate in industrial investment, signed a strategic cooperative agreement with Bolivia to jointly tap lithium resources in Bolivia’s Coupasa salt flats, according to a report by China Daily.

CITIC will submit a proposal to establish a joint venture for extraction if the lithium deposit meets minimum expectations, the company said in a statement.

Lithium carbonate, a key ingredient in batteries, is in rising demand as many countries are devoted to develop electric cars. Companies from South Korea, France, Japan and China are competing for lithium resources in Bolivia, which has one of the world’s largest confirmed reserves.

Demand for electric cars has strong influence on price of lithium carbonate, which is a main component of electric vehicle batteries, said Wei Chishan, an analyst with Shanghai Metals Market, an information service provider of China’s nonferrous metal markets.

Recent price of lithium carbonate was about ¥33,000 ($5,163) a ton. Its price is predicted to be increased by 16 percent annually by 2013 because of rising demand for lithium batteries, according to a report by China International Capital Corp.

China recently surpassed Japan as the world’s largest provider of lithium batteries. It has about one-tenth of the estimated global lithium reserve and is the world’s third largest producer of the metal. Qinghai Province has the largest reserves of lithium in China and accounts for nearly 90 percent of the national output. But experts said lithium resources in Qinghai are of low concentration and more costly to extract than those in Australia and Canada.

CITIC’s operations in Qinghai declined in output in the first half of this year as a result of flooding, the company said.