Bolivia’s Lithium Explained: A Giant Resource, Stalled Deals and the Paz Plan
BOLIVIA · LITHIUM
Key Facts
- —The resource About 23 million tonnes of lithium, mostly beneath the Salar de Uyuni, according to the US Geological Survey.
- —The output State firm YLB makes a few thousand tonnes a year at a plant built for 15,000.
- —The deals Russian and Chinese contracts worth over US$2 billion, signed in 2024, still lack congressional approval.
- —The shift President Rodrigo Paz courts Western investors and has proposed a lithium law and an international tender.
- —The catch The constitution reserves lithium to the state, and local communities have taken deals to court.
Bolivia sits on one of the largest lithium deposits on Earth, yet it supplies almost none of the metal. This guide explains why, who controls the resource and what President Rodrigo Paz is trying to change.
Lithium is the light metal inside most electric-car and phone batteries. Bolivia holds about 23 million tonnes of it, but decades of plans, deals and court fights have yielded little.
Why Bolivia’s Lithium Matters
Bolivia is a landlocked Andean country of about 1.1 million square kilometres, roughly twice the size of France. Its 2024 census counted 11,312,620 people, and its currency is the boliviano.
The country forms the so-called lithium triangle with Argentina and Chile, a high-altitude belt of salt flats. The US Geological Survey (USGS), the American government’s geology agency, puts Bolivia’s lithium resources at 23 million tonnes.
That compares with 28 million tonnes in Argentina and 13 million in Chile, out of about 150 million tonnes worldwide. A resource is an estimate of what lies underground, not proof that it can be mined at a profit.
That distinction is the heart of the Bolivian story. Chile and Argentina turned their brines into large export industries, while Bolivia still produces only a few thousand tonnes a year.
For the wider political and economic backdrop, see The Rio Times guide Bolivia explained in 2026. Lithium has become a test of whether the country can attract foreign capital while keeping the state in charge.
The Salar de Uyuni and the Brine Problem
Most of the lithium lies in brine, a salty underground water, beneath the Salar de Uyuni in Potosí department. The salt flat covers about 10,582 square kilometres and sits roughly 3,656 metres above sea level.
Uyuni’s brine is hard to process because it holds a lot of magnesium alongside the lithium. Mining.com reported a magnesium-to-lithium ratio of about 20 to 1 at Uyuni, far higher than at Chilean and Argentine sites.
The usual method pumps brine into large ponds and lets the sun evaporate the water over many months. El País, a newspaper in Tarija, reported that this method would recover only about 30 percent of Uyuni’s lithium.
What direct lithium extraction means
Direct lithium extraction, known as DLE, uses chemical filters or absorbent materials to pull lithium straight out of the brine. It promises faster output and higher recovery, but it has not yet been proven at industrial scale in Bolivia.
Both foreign contracts signed in 2024 rely on DLE technology. That ties Bolivia’s technical bet closely to its political choice of partners.
Who Controls Bolivia’s Lithium
Bolivia’s constitution treats lithium as a strategic resource reserved to the state. Partnerships are allowed, but the state must keep majority control of at least 51 percent.
The state lithium company is Yacimientos de Litio Bolivianos, known as YLB. It opened its first industrial lithium carbonate plant, at Llipi on the Uyuni flat, in December 2023.
That plant was built to make 15,000 tonnes a year of lithium carbonate, the white powder that battery makers buy. Bloomberg News reported in November 2025 that YLB hoped to produce about 3,500 tonnes that year.
El Deber reported that in its first two years Llipi never exceeded 15 percent of its capacity. El País of Tarija put Bolivia’s 2025 production at about 2,400 tonnes.
The company is also losing money, according to OFEP, the government office that oversees state firms. Its July 2026 report put YLB’s accumulated losses at Bs 527.7 million (about US$44 million).
YLB also had Bs 5,521.7 million (about US$459 million) of loan capital still to repay, the most of any firm reviewed. Those amounts are converted at the Banco Central de Bolivia’s official rate of 12.02 bolivianos per US dollar on 30 September 2026.
Bolivia had held its currency at 6.96 per dollar since 2011 until it let the boliviano float in June 2026. Mauricio Medinaceli, hydrocarbons and energy minister in December 2025, said that month that YLB was in technical pre-bankruptcy.
Royalties, the fees paid to the state on extracted minerals, stood at 3 percent for lithium in early 2026. CEDLA, a La Paz labour research centre, says Law 535 sends 85 percent of that to departments and 15 percent to municipalities.
The China and Russia Contracts
In 2024, under former president Luis Arce, YLB signed two contracts for DLE plants on the Uyuni flat. Together they were worth more than US$2 billion, and YLB would hold 51 percent of each venture.
The first, signed in September 2024, was with Uranium One Group, a subsidiary of Russia’s state nuclear company Rosatom. It covers a plant for 14,000 tonnes of lithium carbonate a year and an investment of about US$970 million.
The second, signed in November 2024, was with CBC, a consortium linked to China’s battery giant CATL. It plans two plants of 10,000 and 25,000 tonnes a year for about US$1.03 billion.
Critics in the liberal think-tank world attacked the terms. Fundación Milenio, a La Paz research foundation, said YLB must repay Uranium One’s investment, leaving Bolivia with most of the risk.
Arce defended the deals as the fastest route to production. “Starting from zero would have a huge cost,” he told Bloomberg News in November 2025, adding that Bolivia could miss the boat.
The court case
On 12 May 2025, a federation representing 53 Indigenous communities of Nor Lípez, in Potosí, sued over the contracts. It questioned the consultation process and the projects’ possible effects on water, land and ecosystems.
On 27 May 2025, a court in the village of Colcha K suspended congressional handling of both contract bills. Opposition deputy Lissa Claros of the centrist Comunidad Ciudadana alliance welcomed the ruling, La Patria reported.
Prensa Latina, Cuba’s state news agency, reported in July 2026 that the Constitutional Court was reviewing the communities’ lawsuits. The Rio Times reported the same month that both deals remained stalled under Paz.
What Changed Under Rodrigo Paz
Rodrigo Paz of the Christian Democratic Party won the October 2025 runoff with 54.96 percent and took office on 8 November 2025. He replaced Arce of the Movement for Socialism (MAS), the left-wing party that had dominated politics since 2006.
His government has sought closer ties with Washington and has reopened questions about the Russian and Chinese deals it inherited. Before the inauguration, his adviser José Luis Lupo told Bloomberg News the contracts were forged behind the backs of the regions.
A new lithium law
In late December 2025, Medinaceli outlined a draft lithium law that splits the Uyuni flat into two uses. One part would become a protected tourism area, and the rest would be offered to companies in an international tender.
Bidders could be private firms or public-private ventures with YLB, according to the trade site El Inversor Energético. El Post, a Bolivian news site, reported pressure for the law to lift royalties from 3 percent to 11 or 12 percent.
The same report said the law would require industrialisation, meaning carbonate, hydroxide or batteries rather than raw brine, and set water limits. As of May 2026, the draft had not been passed, and Potosí’s civic committee was writing a rival text.
The United States and other suitors
On 27 April 2026, Bolivia and the United States signed a memorandum of understanding on critical minerals, including lithium. It was signed by US official Caleb Orr and Bolivia’s mining minister, Marco Antonio Calderón de la Barca.
Other foreign companies are also in talks with the state. Interferencia, a Chilean outlet, reported in February 2026 that YLB was negotiating with EAU Lithium, an Australian firm.
EAU Lithium had been chosen for pilot tests on the salt flat under Arce, using technology licensed from Germany’s Vulcan Energy Resources. YLB also faces 11 audits of its technical, operating and financial records, El Deber reported in May 2026.
In September 2026 the government approved Decree 5727, which sets rules to reorganise, dissolve or liquidate loss-making state companies. YLB was among the firms named in that review, The Rio Times reported.
The Politics of Lithium
Lithium is also a regional and ideological fight. Potosí, the department that contains most of the Uyuni flat, has long demanded a bigger share of lithium income.
El País of Tarija recalled that Potosí’s civic committee rejected a deal with the US company Lithco in the late 1980s. In 2025 the committee, known as Comcipo, opposed the Chinese and Russian contracts over royalties and consultation.
On the left, researchers ask for more transparency rather than more private capital. Alfredo Zaconeta of CEDLA said in 2025 that conflict existed because of a lack of transparency over the contracts.
Former president Evo Morales (2006–2019) called Decree 5727 part of a deal with the International Monetary Fund (IMF). He told supporters on 25 September 2026 that the government was going to privatise the sun, Noticias Fides reported.
El Destape, a left-leaning Argentine news site, argued the decree could open strategic firms such as YLB to sale despite constitutional limits. Pablo Camacho, head of OFEP, told the broadcaster RTP the decision was economic, not political or ideological, ABI reported.
Business-minded critics see the opposite risk, that Bolivia moves too slowly. Andrés Brockmann, a former lithium executive and consultant, told Bloomberg News the window of opportunity was about to close.
What It Means for Foreigners and Investors
Any foreign company must accept a minority stake, because the state keeps at least 51 percent. Contracts also need approval from the Plurinational Legislative Assembly, Bolivia’s two-chamber Congress, which has taken years.
The courts add a further layer, as the Colcha K case shows. Communities can challenge projects over prior consultation, and such a challenge has already frozen two large deals.
Currency risk has also changed. Since the boliviano began to float in June 2026, it has moved from 9.73 to 12.02 per US dollar.
IMF staff agreed a US$1.9 billion, 36-month loan programme with Bolivia in July 2026, and Congress approved it in September. The IMF board had still to vote in late September, and investors in long mining projects are watching it.
Analysts at price-reporting firms urge patience. Federico Gay of Benchmark Mineral Intelligence told Bloomberg News he expected no significant Bolivian production before the end of the decade.
For visitors, the salt flat remains a major attraction near the town of Uyuni. The draft law’s tourism reserve is meant to protect that trade, which Medinaceli said many local people live from.
What Is Not Known
The biggest open question is whether Congress ratifies, renegotiates or rejects the Russian and Chinese contracts. The Constitutional Court’s ruling on the communities’ lawsuits could decide the matter first.
The final shape of the lithium law is also unclear. Royalty rates, the size of the tourism reserve and the rules for a tender have not yet been fixed in law.
It is not known which companies would bid in a tender, or whether US firms will back the April memorandum with money. EAU Lithium’s talks with YLB had produced no published contract as of February 2026.
YLB’s own future is uncertain while the audits and the Decree 5727 review continue. Water use is another unknown, because no large DLE plant has yet operated at Uyuni.
Price matters as well, because lithium fell more than 80 percent from its late-2022 peak, Bloomberg News noted in November 2025. Bolivia’s chance depends on whether it can produce cheaply before rivals lock in battery makers’ supply contracts.
Frequently Asked Questions
Does Bolivia have the world’s largest lithium reserves?
Not in the strict sense. The USGS puts Bolivia’s lithium resources at 23 million tonnes, behind Argentina’s 28 million. Resources are estimates of what lies underground, not proven profitable reserves.
Why does Bolivia produce so little lithium?
Uyuni’s brine is rich in magnesium, which makes evaporation slow and inefficient. Weak finances at the state firm YLB and repeated political and legal fights have also delayed investment.
What happened to the lithium contracts with China and Russia?
YLB signed them in 2024 with CBC and Uranium One, together worth more than US$2 billion. A court suspended their handling in Congress in May 2025, and neither had been ratified by late September 2026.
Can foreign companies invest in Bolivian lithium?
Yes, but only in partnership with YLB, which must keep at least 51 percent. The Paz government has proposed an international tender under a new lithium law that still needs congressional approval.
Is the Salar de Uyuni affected by lithium production?
Industrial evaporation ponds operate on part of the flat, and astronauts photographed one facility there in July 2026. The draft lithium law would protect a separate area for tourism.
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