As of 2024, Bolivia has the world’s largest lithium reserves, estimated at approximately 23 million metric tonnes. Located in the large salt flats in the country's southwest, it is part of the “lithium triangle” with Argentina and Chile. 

In November 2024, the Bolivian government signed a USD 1 billion agreement with China’s CBC Investments, a subsidiary of battery manufacturer CATL, to construct two direct lithium extraction plants in the Uyuni salt flats. These plants aim to produce 35,000 metric tonnes of lithium annually.  

Additionally, in December 2024, Bolivia entered into a USD 970 million agreement with Russia’s Uranium One Group to build a plant with an annual capacity of 14,000 tonnes. “These are illegal contracts according to the constitution,” a former Minister of Hydrocarbons attested.

The CBC contract spans up to 42 years, with operations potentially lasting until 2067, while the Uranium One deal runs for 23.5 years. Bolivia would be producing an estimated 104,000 tonnes of lithium per year under these agreements, which raises doubts about its feasibility. The projected revenue of USD 3 billion annually assumes a price of USD 27,280 per tonne, which is far above the current USD 10,000 market rate. “It makes no sense for two serious companies to invest knowing it is no longer profitable,” confided a Bolivian activist.

“It makes no sense for two serious companies to invest knowing [Bolivia’s lithium project] is no longer profitable.”

Activist, Bolivia

Furthermore, these contracts block other companies from entering the market. “No serious company would agree to sign this,” stated the activist, because of concerns over corruption and the allegations that President Luis Arce’s son Marcelo is orchestrating an extortion scheme targeting foreign investors. The source elaborated, “This extortion has already happened with the two Chinese and two Russian companies. And now three more: an Australian German, an Argentinean and a French company.”

The Uranium One contract is potentially perilous, transferring the risk to Bolivia while granting the Russian company full operational control. The state-owned lithium company Yacimientos de Litio Bolivianos (“YLB”) retains 51 percent, but its investment and operating costs must be covered by production revenues, making the deal highly unfavourable. “It is madness,” declared the former Ambassador, “It violates all Bolivian regulations on state contracting of services.”

With only six months before elections, the speed of these approvals raises suspicions. The deals have already cleared the Energy Commission and could soon pass the Chamber of Deputies, “a sell-out,” asserted a Bolivian energy expert. “The European companies are unlikely to enter under such terms, and if the government changes, these contracts could face immediate legal consequences, possibly as soon as October.”

“The European companies are unlikely to enter under such terms, and if the government changes, these contracts could face immediate legal consequences, possibly as soon as October.”

Energy expert, Bolivia

YLB, responsible for the entire lithium production chain, from prospecting to commercialisation, has only one pilot plant in operation. “Part of the Bolivian government propaganda reel shows that there are now more than 20 companies that also want to start exploitation,” commented the energy expert. “But in reality, there is nothing concrete.” Moreover, the Chinese and Russian companies have only signed Memorandums of Understanding (“MoUs”), a non-binding agreement and have not yet started exploitation.

Unlike its neighbours Argentina and Chile, both global leaders in lithium production and exports, Bolivia remains trapped in a cycle of ambitious promises and persistent delays, struggling to fully capitalise on its vast reserves, with many investors wary of its volatile political climate. With the country’s presidential election in August this year, “Who would want the risk?” questioned our sources.