By Marcelo Rochabrun

(Reuters) – The government disqualified EnergyX, an American start-up, and Tecpetrol, an Argentine energy company, from a race for Bolivian lithium mining. This is because the country aims at tapping its huge resources through partnerships with foreign firms.

Bolivia holds the most lithium reserves in the world. But it has been struggling for years to extract them commercially. It intensified its efforts last spring amid an increase in demand for battery-powered vehicles.

Six other firms still compete for the partnership. Russia’s One and Lilac Solutions, a U.S. start-up, are backed by Bill Gates’s Breakthrough Energy Ventures and the giant Chinese battery manufacturer CATL. TBEA Co Ltd, Fusion Enertech and CITIC Guoan Group Co are the other Chinese companies.

None of the companies have ever commercially exploited lithium before.

Bolivia didn’t explain why Tecpetrol and EnergyX were disqualified. The government said on Tuesday it expected to announce final results https://www.reuters.com/markets/deals/bolivia-still-evaluating-six-firms-lithium-mining-partnerships-2022-06-07 on June 15.

EnergyX is still the dominant competitor. This year, it began pilot production trials for a lithium extraction pilot plant on Bolivia’s Uyuni Salt Flat. To showcase their technology, they have also sought out Bolivian officials and broadcast advertising to Bolivian television.

Juan Carlos Barrera was hired by EnergyX as its South America operations manager. Barrera was previously a senior officer at Chile’s SQM. This is one of the largest producers of lithium in the world.

EnergyX did not comment. Tecpetrol didn’t immediately reply to a request for comments.

Bolivia still faces significant hurdles https://www.reuters.com/markets/commodities/legendary-lithium-riches-bolivias-salt-flats-may-still-just-be-mirage-2022-05-23 in mining its lithium resources, including legal restrictions that currently prevent private companies from doing the extraction.

South America holds the most lithium reserves in the world. However, Bolivia is still behind Chile which is the No. Argentina is the second largest producer, followed by Chile. Argentina has promising projects in its pipeline.