Lithium mining in Bolivia

Lithium Mining in Bolivia has grown in political and economic interest in the 21st century as lithium is a mineral used in the manufacturing of batteries, needed for producing many electronics, cellphones, and electric vehicles. Lithium has grown in value due to the increased demand for these products and a growing global emphasis on renewable energy. More than half of the world's lithium reserves are located in what is known as the lithium triangle: an area that spans parts of Argentina, Bolivia, and Chile. Bolivia has the world's largest reserves of lithium making up an estimated thirty-eight percent of the global total. Bolivia's neighboring countries of Chile and Argentina are responsible for around forty-five percent of the global production, whereas Bolivia makes up less than one percent.
In 2008, then president Evo Morales announced state control of the lithium industry under the state's lithium company Yacimientos del Litio Boliviano (YLB). Since then, YLB has struggled to increase production and most attempts to work with private foreign companies, such as a 2018 deal with the German company ASISA, have been hindered by protests.
Since Morales left the presidency in 2019, in part due to protests related to the ASISA deal, the government's position has shifted slightly. The current president of Bolivia, Luis Arce, is more supportive of foreign investment than Morales and has looked into the possibility of foreign collaboration to expand the industry. This change has been met with opposition from movements that wish to limit foreign involvement. In 2023, YLB made a deal with the Chinese battery company CATL to allow for the further industrialization of the industry. YLB is still in talks with other foreign companies from the US, China, and Russia.
Bolivia is located in the Lithium Triangle with its neighboring countries of Chile and Argentina. Each country has large lithium reserves but varying policies and outcomes with Bolivia experiencing the lowest levels of production.
The process of lithium extraction requires a substantial amount of water, which has caused water shortages for individuals living in this area. In total, sixty-five percent of the water supply in the Lithium Triangle has been consumed by this extraction.
Of the three countries, Chile has consistently outpaced its neighbors in terms of production yet it has the lowest share of resources. Extraction is less expensive in Chile than in any other country due to its natural conditions, and trade agreements with the US and the EU. However, in recent years, Chile has struggled to expand the industry even as demand for the mineral has increased. The government announced in April 2023 its plan to increase state control over the lithium industry. No new investments have been made since this announcement and with the control of state-owned mining companies expanding, the role of the private sector is uncertain. This lack of investment has caused production to slow, leading to predictions that Argentina may surpass Chile and become the largest producer in the Lithium Triangle.
While Chile has increased state control and regulation, Argentina has sought to make the industry more favorable to investors and increase the capability of the industry to expand production. In Argentina provincial governments are responsible for regulating the mining sector which has allowed for deals to be made more easily. Additionally, provincial governments in Argentina collect only a three percent tax from mines compared to forty percent in Chile and forty-five percent in Bolivia. Argentinian President Javier Milei has worked to undo regulations, increasing the confidence of investors. By the end of 2025, Argentinian lithium production is expected to increase fivefold, surpassing Chile as the largest Latin American producer.
Protests have occurred throughout Argentina where local communities have little say in mining deals that affect their land, in contrast to Bolivia and Chile where indigenous groups must be consulted
There are several factors that may contribute to Bolivia's low levels of production in contrast to Chile and Argentina. An issue that limits the industrialization of the lithium industry is the decentralization that has occurred since the country adopted a plurinational framework for governing in 2009. This decentralization has made it difficult for the national government to industrialize the industry without the consent of indigenous communities. This, coupled with a rejection of foreign investment, may be responsible for the low levels of production. Bolivia has also faced economic and technological complications as the process of extracting lithium from Bolivian salt flats is far more challenging, time consuming, and expensive than it is in other countries.