Bolivia holds a significant position in the global energy transition due to its vast lithium reserves, among the largest in the world. The lithium deposits concentrated in the Salar de Uyuni region provide a critical raw material for electric vehicles and renewable energy technologies. However, for Bolivia to transform this potential into economic growth, it is strategically essential to ensure political stability and adopt a more open investment policy in the mining sector.
Lithium is an indispensable element for battery technologies, and its demand is rapidly increasing with the rise of electric vehicles. Global powers such as China, the United States (US), and the European Union (EU) are fiercely competing to secure access to this valuable resource. However, Bolivia struggles to manage this process due to its state-centered approach, infrastructure deficiencies, and political uncertainties. Nevertheless, recent developments suggest that the country could play a more active role in the global lithium market through significant investment agreements with China and Russia.[1]
Bolivia is part of a region known as “Lithium Triangle” alongside Argentina and Chile.[2] Despite holding approximately 21% of the world’s lithium reserves, Bolivia has yet to achieve large-scale production.[3] While Chile and Argentina play active roles in the global lithium market, Bolivia has not yet made significant progress in this area due to infrastructure deficiencies and frequently shifting government policies.
Recently, the Bolivian government signed a $1 billion investment agreement with the China-based CBC consortium.[4]The agreement includes the establishment of two major direct lithium extraction (DLE) plants in the Uyuni Salt Flats region and the production of 35,000 tons of lithium annually.[5] The government has announced that it will hold a 51% stake in these projects, raising hopes that the investment will accelerate Bolivia’s lithium production.[6]
Additionally, in September 2024, the Bolivian government signed a $976 million agreement with Russia’s “Uranium One” company.[7] This agreement aims to produce 14,000 tons of lithium annually.[8] However, for the agreement to be implemented, it requires approval from Bolivia’s Congress, and since the current government lacks a parliamentary majority, there is a possibility of delays in the process.
Lithium extraction is often criticized for its environmental impact.[9] The evaporation method used in the Salar de Uyuni region requires large amounts of water, potentially leading to the depletion of water resources, soil salinization, and ecosystem degradation.
Bolivia’s agreement with CBC specifies the use of direct lithium extraction (DLE) technology.[10] This method stands out as a faster and less environmentally damaging technique compared to traditional evaporation ponds. However, it is costly and requires further testing for feasibility.
Moreover, there is growing local opposition to these mining activities. Local communities argue that large-scale lithium mining threatens their living environment and does not provide sufficient social and economic benefits. How the Bolivian government responds to these concerns is going to directly impact the success of these projects.
Bolivia’s lithium reserves have become an area of strategic competition among global powers. China, the US, and the EU are conducting direct negotiations with Bolivia to invest in lithium mining and secure access to this critical raw material. As electric vehicles become more widespread and renewable energy technologies develop, access to lithium provides countries with economic and geopolitical advantages. In this context, how Bolivia manages its natural resources and which actors it collaborates with will be decisive in the global energy balance.
China, in particular, aims to expand its influence in the region through its $1 billion lithium investment agreement with Bolivia.[11] China-based battery manufacturer CATL meets a very large share of global lithium demand and plans to further increase this share with its investments in Bolivia.[12] The US, on the other hand, closely monitors Bolivia’s projects in an attempt to counterbalance China’s influence in Latin America. However, given the historically fluctuating nature of US-Bolivia relations, Washington appears to adopt a more cautious approach toward direct investments.
Meanwhile, the EU is also seeking cooperation with Bolivia to reduce its dependence on lithium for renewable energy and battery production. However, Europe’s presence in Latin America is not as strong as that of China or the US, making its investments in Bolivia relatively limited. While this competitive environment offers great economic opportunities for Bolivia, it will be important for the country to flex its investment policies and strengthen its infrastructure to take advantage of this advantage. If Bolivia can effectively manage investments from different actors by striking a strategic balance, it can become a more competitive player in the global lithium market.
The Bolivian government tends to keep the lithium sector under state control and requires foreign companies to form partnerships in which the state holds a 51% stake before they can mine in the country.[13] In recent years, the government has particularly focused on strengthening strategic partnerships with China to accelerate lithium production. However, infrastructure shortcomings, technological limitations, and political instability have caused this process to progress more slowly than expected.
While lithium mining has the potential to create significant economic opportunities for Bolivia, the gains could come at the cost of losses. If the Bolivian government successfully increases lithium production, it could secure a major revenue source and become a more influential player in the energy market as global demand rises. However, there are also negative consequences to consider. Environmental degradation can cause serious damage to the local ecosystem and lead to major problems for local communities, such as depletion of water resources. Additionally, the government’s centralized policies could exclude the private sector and foreign investors, potentially limiting technological advancements and production capacity.
Despite possessing one of the world’s largest lithium reserves, Bolivia has yet to fully utilize its potential. As global powers race for this valuable resource, it would be appropriate for the Bolivian government to take strategic decisions. New investments with countries like China and Russia could allow Bolivia to become a major player in lithium production. However, the success of this process will depend on critical factors such as infrastructure development, political stability, and collaboration with local communities.
[1] “Agreements with China and Russia to Produce Lithium May Put Bolivia at the Center of Coup Attempts”, Brasil de Fato, https://www.brasildefato.com.br/2024/06/27/agreements-with-china-and-russia-to-produce-lithium-may-put-bolivia-at-the-center-of-coup-attempts/, (Access Date: 02.03.2025).
[2] “The Lithium Triangle: Where Chile, Argentina, and Bolivia Meet”, Harvard International Review, https://hir.harvard.edu/lithium-triangle/, (Access Date: 02.03.2025).
[3] Graham, Thomas. “Bolivia’s Dream of a Lithium Future Plays Out on High-Altitude Salt Flats”, The Guardian, https://www.theguardian.com/world/2023/jan/25/bolivia-lithium-mining-salt-flats, (Access Date: 02.03.2025).
[4] Ramos, Daniel. “Bolivia Says China’s CBC to Invest $1 Billion in Lithium Plants”, Reuters, https://www.reuters.com/markets/commodities/bolivia-says-chinas-cbc-invest-1-billion-lithium-plants-2024-11-26/, (Access Date: 02.03.2025).
[5] Ibid.
[6] Ibid.
[7] “Russia’s Uranium One to Build Bolivia’s First DLE Plant”, Mining.com, https://www.mining.com/russias-uranium-one-to-build-bolivias-first-dle-plant/, (Access Date: 02.03.2025).
[8] Same source.
[9] Ballarino, Florencia. “Cuál es el impacto ambiental y social de la explotación del litio en la Argentina”, Chequeado, https://chequeado.com/el-explicador/cual-es-el-impacto-ambiental-y-social-de-la-explotacion-del-litio-en-la-argentina/, (Access Date: 02.03.2025).
[10] Jamasmie, Cecilia. “Bolivia Uyuni Plant to Yield First Lithium by 2025-End”, Mining.com, https://www.mining.com/bolivia-uyuni-plant-to-yield-first-lithium-by-2025-end/, (Access Date: 02.03.2025).
[11] Ramos, a.g.e., (Access Date: 02.03.2025).
[12] “Chinese Firm CATL to Develop Huge Bolivian Lithium Deposit”, BBC News, https://www.bbc.com/news/world-latin-america-64355970, (Access Date: 02.03.2025).
[13] “Empresas de Rusia y China Asumen el Riesgo en Proyectos del Litio y los Contratos Aseguran 51% de Beneficios para el Estado”, Ministerio de Hidrocarburos y Energía de Bolivia, https://www.mhe.gob.bo/2025/01/13/empresas-de-rusia-y-china-asumen-el-riesgo-en-proyectos-del-litio-y-los-contratos-aseguran-51-de-beneficios-para-el-estado/, (Access Date: 02.03.2025).
