LA PAZ - Bolivia's government and Chinese consortium CBC, which includes battery manufacturer CATL, have signed an agreement for CBC to build two direct lithium extraction plants for at least $1-billion, government authorities said on Tuesday.

The government will take a 51% stake in the project, to be located in the Uyuni salt flat in southwest Bolivia, within the so-called lithium triangle shared with Chile and Argentina.

The two plants together are intended to produce 35 000 metric tons of lithium a year, said Omar Alarcon, head of state-run lithium company YLB.

"This service contract will develop a final design for engineering, construction, operation and maintenance of a plant that will produce 10 000 t/y of lithium carbonate and another plant producing 25 000 t of battery-grade lithium carbonate per year," he told a press conference.

"CBC will build plants based on its technology at its own cost and risk," he added, saying the expected $1-billion investment represented initial construction.

Despite holding the world's largest resources of lithium, which is used to make electric-vehicle batteries, Bolivia has not managed any significant production and many investors are wary of its volatile political climate. The country is expected to hold a presidential election next year.

CATL supplies batteries for more than a third of electric or hybrid vehicles globally.

Direct lithium extraction is an innovative method to extract lithium more quickly than traditional methods that use massive evaporation pools.

Bolivia also signed a contract in September with Russia's Uranium One Group for construction of a $970-million plant to produce 14 000 t of lithium carbonate annually. However, the deal needs approval from Congress, where the ruling party is fractured and President Luis Arce lacks a congressional majority.

The agreement with CBC also requires lawmaker approval.

Arce said the government is scouting out more companies to invest in lithium, and has received interest from various countries.

"It's not just Russian and Chinese companies that are interested in investing in Bolivia," he said. "Our country isn't closed off to any company."