People walk in a small town near the Salar de Uyuni, a vast white salt flat at the center of a global resource race for the battery metal lithium, in Uyuni, Bolivia March 28, 2022.
People walk in a small town near the Salar de Uyuni, a vast white salt flat at the center of a global resource race for the battery metal lithium, in Uyuni, Bolivia March 28, 2022. Reuters / CLAUDIA MORALES

American startup EnergyX and Argentine energy firm Tecpetrol have been disqualified from a race to mine Bolivian lithium, the government said, as the country aims to tap its vast resources in partnership with one or more foreign companies.

Bolivia has the world's largest lithium resources but it has struggled for decades to mine them commercially, amping up its efforts last year amid a surge in demand for batteries for electric vehicles.

Six firms are still competing to secure a partnership. They include Russia's Uranium One, U.S. startup Lilac Solutions - backed by German carmaker BMW and Bill Gates's Breakthrough Energy Ventures - and giant Chinese battery maker CATL. The others are Chinese firms Fusion Enertech, TBEA Co Ltd and CITIC Guoan Group Co.

None of the firms has exploited lithium at a commercial scale before.

Bolivia did not say why the EnergyX and Tecpetrol had been disqualified. The government said on Tuesday it expected to announce final results on June 15.

Still, EnergyX was perhaps the most prominent competitor, having begun production tests a lithium extraction pilot facility on Bolivia's Uyuni salt flat this year. It has also courted officials and aired advertising on Bolivian television to show its technology.

EnergyX recently hired Juan Carlos Barrera to oversee operations in South America. Barrera is a former senior official at Chile's SQM, one of the world's largest lithium producers.

EnergyX declined to comment on the process. Tecpetrol did not immediately respond to a request for comment.

Bolivia still faces significant hurdles in mining its lithium resources, including legal restrictions that currently prevent private companies from doing the extraction.

South America has the world's largest lithium reserves, but Bolivia is behind Chile - the world's No. 2 producer - and Argentina - which has a promising pipeline of new projects.