<article><p class="lead">Bolivia's government rescinded legislation to create a joint venture with a German company to exploit its extensive lithium reserves.</p><p>A 3 November executive order annuls December 2018 legislation that establishes a partnership between Bolivia's state-owned lithium company YLB and Germany's ACI Systems to tap brine lithium from the Uyuni salt flats. ACI Systems, with 49pc in the joint company, committed to investing $1.3bn.</p><p>The Bolivian government has remained silent about its decision. ACI Systems, in a statement sent to <i>Argus</i>, said it was surprised by the news and lack of official communication from the Bolivian government.</p><p>"We have not received official information from the Bolivian side so far and to us it is not comprehensible. Until a few days ago, the project was running as planned," said company chief executive Wolfgang Schmutz.</p><p>The government's move coincides with continued protests against President Evo Morales' <a href="https://www2.argusmedia.com/en/news/2000940-bolivia-in-turmoil-over-tainted-vote-tally?backToResults=true">controversial re-election</a> to a fourth term on 20 October, and nearly a month of strikes in the Potosi department where the Bolivian-German company would have operated.</p><p>The Potosi protests, which began 7 October, are seeking higher royalties and a greater allocation of the revenue from the lithium project. It was the latest and loudest protest against the project that erupted shortly after the contract was signed in 2018.</p><p>Despite the ongoing protests, Morales carried Potosi with 49.4pc of the votes in the election, according to electoral agency OEP.</p><p>Throughout the re-election campaign, the Morales government had defended the lithium agreement and criticized the main opposition coalition for suggesting that it would review the contract with ACI Systems and another signed with a Chinese group to work brine lithium reserves in Oruro department.</p><p>YLB has been carrying out separate projects in Uyuni for the past few years. The company's lithium carbonate pilot project will produce 400t this year and is scheduled to reach 1,000t in 2020. </p><p>A Chinese group, led by Maison Engineering, began construction on a large-scale lithium carbonate plant last year. It will be ready in mid-2020 and commercial production should start in August 2020. This YLB project would provide lithium carbonate to the battery plant.</p><p>The agreement with ACI was the final step in a plan to produce lithium hydroxide, cathodes and batteries. Production was initially expected to kick off in 2021.</p><p>According to the US Geological Survey (USGS), Bolivia has 9mn t of lithium reserves, which places it second in the world after Argentina, which has 14.5mn t. </p><p>Australia is the world's leading lithium producer with 2018 output of 51,000t, followed by Chile at 16,000t and Argentina with 6,200t last year. </p></article>
