Bolivia’s salt flats have long been a tourist draw: a great white expanse that, when it floods, becomes an unearthly mirror of the sky. But in recent years visitors may have glimpsed tiny silhouettes of excavators on the horizon – a hint of the industrial future that awaits.

The brine beneath the salt flats contains huge amounts of lithium, the metal essential for the electric batteries and the green energy transition. On Friday, Bolivia announced it would partner with a Chinese consortium to extract it, reviving dreams of a lithium-powered economy.

Surging demand for lithium has caused prices to increase more than 10-fold since 2020, to record highs of almost $85,000 per tonne. And according to the United States Geological Service, Bolivia has 21m tonnes of lithium: more than any other country in the world.

It is yet to extract significant quantities of the metal. But Bolivia may yet have time to join the market while high prices last.

“Today begins the era of industrialisation of Bolivian lithium,” said President Luis Arce, when the new deal was announced.

“There’s no time to lose,” he added.

Bolivia first declared its intent to industrialise its lithium shortly after former president Evo Morales led the Movimiento al Socialismo (Mas) to power in 2006. The Mas has governed for all but one year since, including the current administration.

Throughout, the Mas has insisted on sovereign control of Bolivia’s lithium, with the state trying to develop it alone, or with limited input from foreign companies.

The typical method to extract lithium involves pumping brine into ponds and processing the lithium salts that crystallise once the water has evaporated.

The Bolivian state has invested roughly $800m in this method, with a grid of ponds and an unfinished plant that it says will begin producing 15,000 tonnes of lithium carbonate per annum starting this year.

That would make Bolivia a minor player in the global market, which produced more than 600,000 tonnes of lithium carbonate in 2022.

But this method, which works well enough in the salt flats of neighbouring Chile and Argentina, is less well suited to Bolivia, where the brine has high levels of impurities and the salt flats have a rainy season of several months.

YLB, the state lithium company, has admitted to relatively poor results.

And when Arce’s government came to power in 2020, this arm of the lithium project seemed to be relegated.

In a change of strategy, YLB called for proposals from foreign companies to develop new “direct lithium extraction” technologies that can pull lithium straight from brine, potentially without the need for solar evaporation.

Such technologies could cut water use and reduce dependency on the weather. But they are largely unproven, with only a few examples of use at commercial scale.

The Chinese consortium that made the winning proposal includes CATL, the world’s biggest battery producer.

The deal further locks in Chinese dominance of the battery industry and its supply chains. Just two Chinese companies, CATL and BYD, produce more than half of the world’s batteries. Roughly 60% of the world’s lithium is processed in China.

There may yet be more deals to come. The Bolivian government said it was still negotiating with the five other companies from China, Russia and the US.

There are few details about the current agreement, except that it includes more than $1bn of investment for industrial complexes in two of Bolivia’s three salt flats, each of which will produce 25,000 tonnes of lithium carbonate a year.

Arce added that Bolivia would begin exporting electric batteries in 2025.

But the announcement left many questions about the nature of the investment, how the project will be managed and how the earnings will be split between the consortium and the various levels of Bolivia’s government.

And even advocates of moving up the value chain were sceptical about the plan to produce batteries by 2025.

“The reality of the country shows us that this dream is impossible,” said Héctor Córdova, former president of Bolivia’s state mining company. “We lack the basic industry, we don’t have qualified personnel, nor do we have a plan for industrial development in so short a space of time.”

The deal with the Chinese consortium isn’t the first that Bolivia has signed with foreign companies.

In 2018, it signed a deal with ACISA, a German company, only to cancel it in the face of protests in the city of Potosí, capital of the region that holds most of Bolivia’s lithium.

The Potosí civic committee, an umbrella civil society organisation in the city, began a strike over the terms of the ACISA deal shortly before the October 2019 presidential election. Morales won that vote amid allegations of fraud – later contested – that sparked protests across the whole country.

In response, Morales cancelled the deal with ACISA. But the protests continued, the police mutinied, and the army suggested Morales resigned, which he did.

Morales has described the events of 2019 as a “lithium coup”, claiming the US wanted to punish Bolivia for seeking partnerships with Russia and China – even though the deal was with a German company, and on terms widely seen as favourable for that company.

The civic committee of Potosí has demanded to know the details of the new deal, with the implied threat of fresh protests.

Meanwhile in towns like Río Grande, on the edge of the salt flats, the announcement was met with a mixture of hope and doubt.

“There will be promises of jobs, money and development for the region,” said Donny Ali, a resident of Río Grande and former director of lithium at YLB. “But we’ve been hearing this since the governments of Evo Morales.”

Aside from economic benefits, says Ali, the greatest concern is over water: it isn’t known how much of it is underground, let alone how much of it the lithium mining will use.

Ali has one eye on Chile, where local communities have reaped the benefits – and borne the cost – of lithium mining for years already.

“I want to see if this money has really helped them,” said Ali. “If they really prefer the money – or if they would prefer to have water stability and greater harmony with Mother Earth.”