By Adam Jourdan
LA PAZ (Reuters) - The new chief of Bolivia's state-owned lithium company YLB plans strict limits on foreign investment in extraction and processing of the white metal key to electric vehicle batteries, he told Reuters in his first interview with international media since taking the reins this month.
Juan Carlos Zuleta, a lithium expert who has worked in Chile and Bolivia, said a deal with a German firm that was aborted last year would remained shelved, while another with a Chinese partner was being reassessed.
"It is important for the international community to know that Bolivian law says lithium should be extracted and processed by Bolivians," he said in an hour-long interview at YLB's headquarter in La Paz. "Now we are here to comply with the law."
He was referring to a constitution put in place under former socialist leader Evo Morales, who resigned and fled the country in November after a disputed election and widespread protests.
Zuleta said Bolivia would not strike deals in the short-term allowing overseas firms with more advanced expertise to come in and help ramp up extraction. Instead he would look to strengthen local know-how and work with outside expert advisers.
Bolivia, Chile and Argentina form South American's "lithium triangle." The U.S. Geological Survey estimates that Bolivia has 9 million tonnes of identified lithium resources buried beneath its famed salt flats, the largest being the Salar de Uyuni.
However, its lithium industry barely got off the ground when Morales was in office, due to a lack of local expertise, push-back by local communities, tougher conditions and higher extraction costs than in neighbouring Chile.
Analysts said many of those same obstacles still exist and that with low global lithium prices it will be tough for Bolivia to create a commercial lithium industry any time soon.
Zuleta said he can boost technical expertise through a network of global experts, while leveraging new, little-tested technology like direct lithium extraction.
Bolivia has been producing around 400 metric tones of lithium per year in a test site, a tiny amount, he said, but should be able to scale up fast.
"I guess if everything happens in the manner we are hoping it will happen we could be reaching the goal to produce around 50,000 metric tonnes in the next five years... That's possible, we just have to put things in the right place and get to work."
He added a deal with German firm ACI Systems struck under Morales but scrapped last year would not move forward or be revived. "We don't see in the near future any possibility to reinstate that kind of arrangement."
A separate deal with a Chinese partner Xinjiang TBEA was also under scrutiny though he hoped it could move forward under the right conditions.
"We're not going to leave this project behind," he said referring a 15,000 tonne capacity lithium plant. He said the plant should be complete by the end of the year and ramp up to full production one to two years after that.
Zuleta pointed to the global electric vehicle revolution spreading to South America as a positive, though agreed there was a major caveat to all his plans: new elections on May 3.
"We hope that we will have the opportunity to accomplish all the goals we are proposing right now, but we still have to see what the final results will be in May."
(Reporting by Adam Jourdan; additional reporting by Monica Machicao and Dave Sherwood; Editing by David Gregorio)