Bolivia’s government has signed on to a $1.4 billion deal with Chinese battery giant CATL to develop that nation’s lithium reserves.

Reuters reported that the partnership was originally made in January and the it connects CATL, the world's largest manufacturer of electric vehicle batteries, with Bolivia's salt flats that are home to the world's largest lithium resources.

Bolivian President Luis Arce confirmed the commitment to build two lithium plants to extract minerals from the country's Uyuni and Oruro salt flats.

“We met with Burton Roy (Yu Bo), CEO of the Investment Committee of CATL to confirm the investment of $1.4 billion,” the president said via Twitter, adding that as partners they would “evaluate the possibility” of increasing investments to 2028.

Construction of both plants could begin as soon as July, according to the country's energy ministry, with overall investment climbing to around $9.9 billion during the project's industrial process.

Reuters reported this announcement follows a partnership deal signed on January 20 between Bolivia's state-run lithium company, Yacimientos del Litio Bolivianos (YLB), and a Chinese consortium, in which CATL would invest more than $1 billion in the project’s first stage in exchange for rights to develop the two lithium plants. Each project could produce up to 25 kt of battery-grade lithium carbonate per year.

CATL does not currently produce any lithium, although it has invested in a number of Chinese projects.

Lithium resources in Bolivia's iconic salt flats are estimated at 21 Mt, according to the U.S. Geological Survey, but as yet has almost no industrial production or commercially viable reserves.

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