LA PAZ – Bolivia’s state-owned lithium company and German firm ACI Systems signed an agreement on Friday to create a strategic partnership focused on industrializing the vast lithium deposits in the South American nation’s Uyuni Salt Flat.

The agreement was sealed at the Bolivian government’s headquarters by Yacimientos de Litio Bolivianos (YLB) chief Juan Carlos Montenegro and the CEO of ACI Systems, Wolfgang Schmutz.

YLB will hold 51 percent of the joint venture.

Present for the signing along with the executives were Bolivian Vice President Alvaro Garcia Linera and the economy minister of the German state of Thüringen, Wolfgang Tiefensee.

The partnership will focus on producing batteries with the lithium extracted from Uyuni, a dried-up sea bed in southwestern Bolivia that covers more than 10,000 sq. km (4,000 sq. mi).

The salt flat contains more than 10 million tons of lithium, a third of the world’s reserves, Garcia Linera said.

After the signing ceremony, he said that Bolivia’s lithium industrialization program will receive German investments, technological inputs, as well as access to markets, such as the European market for electric vehicle batteries.

The investment needed to launch the cathode and battery manufacturing plant is expected to be close to $900 million in three years, Linera said.

Tiefensee said that the agreement between the two countries, through which the German firm would provide environmentally-friendly technological inputs to Bolivia, was a “historic moment.”

He added that the public-private joint venture would provide “the highest possible added value” for Bolivia, while exploiting the resource “in an intelligent way.”

Last month, Bolivian President Evo Morales invited German Chancellor Angela Merkel to visit the South American nation to discuss several projects, including the industrialization of lithium.