Bolivia's government has scrapped a joint venture with Germany's ACI Systems to exploit its vast lithium reserves, after President Evo Morales bowed to regional pressure, a newspaper reported Monday.

Civil organizations demanded that the government cancel the deal, unhappy at what they considered extremely low royalties from the contract.

The cabinet signed "the abrogation of supreme decree N? 3738 of December 7, 2018," which established the venture, interior ministry official Daniel Apaza told the El Potosi newspaper.

State company Yacimientos de Litio Bolivianos (YLB) teamed up last year with ACI Systems to produce lithium hydroxide for use in electric vehicle batteries.

The Salar de Uyuni, the world's largest salt flat high in the Andes in southwestern Bolivia, is also one of the largest deposits of lithium in the world
The Salar de Uyuni, the world's largest salt flat high in the Andes in southwestern Bolivia, is also one of the largest deposits of lithium in the world AFP / Aizar RALDES

The joint venture was to help develop one of the world's largest lithium deposits at the Salar de Uyuni in Bolivia's Potosi region.

Potosi civic leader Marco Pumari said the cancellation "is an achievement for the people of Potosi" and "a clear sign that the people of Potosi have always been right about this submissive and traitorous" deal.

Civil organizations in Potosi have taken part in two weeks of protests against Morales' controversial re-election for a fourth term, and are demanding new elections be held.

The joint venture was set up to manufacture electric-vehicle batteries in Potosi for the growing European market.

Germany