German foreign minister seeks closer lithium partnership with Bolivia

“Bolivia is rich in raw materials, especially lithium, which is indispensable for our energy transition, for electric mobility and for many other sectors in Germany,” the foreign minister of Germany, Wadephul, said ahead of his visit to the resource-rich South American country.

Bolivia holds the world’s largest lithium reserves, a key component for batteries and electric vehicles as well as for portable electronics such as smartphones and laptops, and in solar and wind power systems.

Demand for lithium-ion batteries is rising rapidly, and the government of Germany wants to reduce reliance on China in this area.

Wadephul said Bolivia also offers impressive potential regarding rare earths, another group of critical raw materials. “Our potential for cooperation is large,” the German foreign minister added.

Talks with new Bolivian leadership

In the south-eastern city of Santa Cruz, Wadephul is due to meet the new Bolivian president, Rodrigo Paz Pereira, who is regarded as a moderate reformer. Meetings are also planned with the new foreign minister, Fernando Hugo Aramayo, as well as with business representatives.

Paz, from the Christian Democratic Party, won a run-off election in October. The election ends almost two decades of left-wing governments, which were long marked by a power struggle between former president Evo Morales and outgoing head of state Luis Arce of the left-wing Movement for Socialism (MAS).

Paz inherits big challenges, including a deep economic crisis marked by high inflation, shortages of fuel and food, and an acute lack of medicines.

Bolivia, a landlocked country with around 12 million inhabitants, is one of South America’s poorest nations.

Wadephul: Bolivia could join Mercosur deal

Wadephul said Paz intends to open Bolivia to the world. “Bolivia has our full support in this,” the minister said.

He added that Bolivia, a new member of the South American trading bloc Mercosur, could join a deal covering Brazil, Argentina, Paraguay, Uruguay and the European Union’s 27 member states, seeking to establish one of the world’s largest free trade zones. A conclusion of the deal is in sight after more than 25 years of negotiations.

“That would be an additional boost for German-Bolivian economic relations,” Wadephul said.

According to the European Commission, the free trade zone with more than 700 million inhabitants would be the largest of its kind in the world and would also serve as a signal against the protectionist tariff policy of US President Donald Trump.

The plan is to reduce tariffs and trade barriers between the EU and the Mercosur bloc to a large extent. The deal covers Brazil, Argentina, Paraguay and Uruguay. Bolivia, as a new member, and Venezuela, which has been suspended since 2016, are not included.