Musk’s Lithium Nightmare? Russia and Bolivia’s $970 Million Deal Could Shake Up the Market!

Russia’s state nuclear company subsidiary Uranium One Group will partner with Bolivia to build a lithium carbonate plant. As international competition over Bolivia’s lithium development intensifies, cooperation between Russia and Bolivia is expected to grow stronger.

On Wednesday, Rosatom announced that Uranium One Group had signed a contract with Bolivia’s state-owned lithium company YLB to establish a lithium carbonate production facility in Potosi, southern Bolivia. Bolivia’s President Luis Arce, Uranium One Group Chairman Omar Alarcon, and Mikhail Ledenyov, Russian Ambassador to Bolivia, attended the contract ceremony.

The new plant will be built at the world’s largest lithium-containing salt flat, the Salar de Uyuni, with an investment exceeding $970 million. The facility will be located at an elevation of 3,650 meters and will cover an area of 1,500 square kilometers. Operations are expected to begin in the second half of 2025, with an annual production target of 14,000 tons of lithium carbonate.

Russia plans to adopt its direct lithium extraction (DLE) technology using adsorption to increase production efficiency and enhance environmental safety. This technology is designed to minimize the use of toxic chemicals and maximize water recycling, protecting the brine ecosystem.

In January, Uranium One Group signed a large-scale lithium contract with the Bolivian government, announcing a $450 million investment in a pilot lithium mining project. In June last year, the company agreed to build a lithium carbonate industrial complex at the Pastos Grandes mine in Bolivia.

With the world’s largest lithium reserves, Bolivia is estimated to hold about 23 million tons. Due to the rising demand for electric vehicles and batteries, it has caught the attention of global companies, including Tesla, as an attractive investment destination.

As the partnership between Russia and Bolivia continues, competition between nations for Bolivia’s lithium development is expected to intensify. Industry observers suggest that this contract could motivate Tesla CEO Elon Musk. Tesla heavily relies on lithium for its electric vehicle batteries, and this partnership is expected to escalate the competition for access to Bolivia’s vast lithium resources.

Meanwhile, Musk previously made controversial remarks in 2022, expressing support for a coup against Bolivia’s democratically elected President Evo Morales. Although the comments were later deleted, they were widely seen as revealing his capitalist motivations.