LA PAZ, Nov 26 (Reuters) - Bolivia's government and

Chinese consortium CBC, which includes battery manufacturer CATL

, have signed an agreement for CBC to build two

direct lithium extraction plants for at least $1 billion,

government authorities said on Tuesday.

The government will take a 51% stake in the project, to be

located in the Uyuni salt flat in southwest Bolivia, within the

so-called lithium triangle shared with Chile and Argentina.

The two plants together are intended to produce 35,000

metric tons of lithium a year, said Omar Alarcon, head of

state-run lithium company YLB.

"This service contract will develop a final design for

engineering, construction, operation and maintenance of a plant

that will produce 10,000 tons of lithium carbonate per year and

another plant producing 25,000 tons of battery-grade lithium

carbonate per year," he told a press conference.

"CBC will build plants based on its technology at its own

cost and risk," he added, saying the expected $1-billion

investment represented initial construction.

Despite holding the world's largest resources of lithium,

which is used to make electric-vehicle batteries, Bolivia has

not managed any significant production and many investors are

wary of its volatile political climate. The country is expected

to hold a presidential election next year.

CATL supplies batteries for more than a third of electric or

hybrid vehicles globally.

Direct lithium extraction is an innovative method to extract

lithium more quickly than traditional methods that use massive

evaporation pools.

Bolivia also signed a contract in September with Russia's

Uranium One Group for construction of a $970-million plant to

produce 14,000 tons of lithium carbonate annually. However, the

deal needs approval from Congress, where the ruling party is

fractured and President Luis Arce lacks a congressional

majority.

The agreement with CBC also requires lawmaker approval.

Arce said the government is scouting out more companies to

invest in lithium, and has received interest from various

countries.

"It's not just Russian and Chinese companies that are

interested in investing in Bolivia," he said. "Our country isn't

closed off to any company."