According to the US Geological Survey Bolivia has 21 Millon tons of lithium reserves, which makes it the largest owner of the metal around the world¹. However, in July of 2023, Bolivian Lithium Deposits (YLB for its acronym in Spanish) found new lithium resources in Coipasa and Pastos Grandes salt flats, which after proper quantification showed that Bolivia now has 23 Millon tons of the metal².

Although Bolivia has the largest lithium reserves, it is yet to join the international market with a significant amount of production. Unfortunately, and in comparison, with Argentina and Chile, the Bolivian Government has failed to industrialize lithium during the past few years. There are several reasons for this late response, from having issues with the extraction methods³, to social conflicts⁴ with indigenous communities, to several intents of the government to administer the industrialization of lithium.

However, in the past few years, it seems that the Bolivian Government has finally consider the importance of the metal and is looking after the opportunity to massively produce lithium in the future. According to the Ministry of Hydrocarbons and Energies it is estimated that the country will generate USD 5.000 Millon for the sale of lithium by 2025⁵. If this is the case, private parties will eventually participate alongside the Bolivian State-

Therefore, this brief article seeks to provide: (i) background information about the Evaporative Resources Industrialization Project made by the Bolivian Government since 2008; (ii) the legal regime that governates lithium exploration, exploitation, and industrialization; and (iii) possible foreign participation in the upcoming years.

1. Evaporative Resources Industrialization Project and Lithium Nationalization

Since 2008, the Bolivian government decided to start its Evaporative Resources Industrialization Project (ERIP) in which Lithium plays the main role. In this year, with the enactment of Supreme Decree N° 2949⁶, dated April 1^st, 2008, the Bolivian Mining Corporation (COMIBOL by its acronym in Spanish) was instructed to create the National Evaporative Resources Management6 (GNRE by its acronym in Spanish), which was responsible for the industrialization of evaporitic resources in the Uyuni Salt Flat.

In 2009, by means of the Bolivian Constitution, Lithium was declared to be of a strategic nature for the country⁷, meaning that exploration, exploitation, and industrialization of Lithium are under full administrative control. In addition, since that year, the government decided to develop the following projects: (i) Semi-Industrial Potassium Chloride Plant, started in 2012; (ii) Lithium Carbonate Pilot Plant, started in 2013; (iii) Lithium Battery Assembly Pilot Plant, started in 2014; and (iv) Cathodic Materials Pilot Plant, which started in 2017⁸.

Finally, through Law 928, dated April 27^th, 2017 (Law 928) the State decided to create YLB, a national strategic public company that oversees the production chain of lithium. YLB is fully owned by the central level of the State and is under tuition of the Ministry of Energies. Unfortunately, the creation of YLB only ensured the nationalization of Lithium and the prohibition for all foreign or domestic investors to directly participate in the Lithium production chain. However, in 2021 YLB decided to launch a bid for direct extraction of lithium.

2. Lithium’s Legal Regime in Bolivia

As mentioned before, the Bolivian Constitution highlights that all natural resources are of property and exclusive domain of Bolivian people⁹, therefore, to participate in the production chain of a mining project, one must obtain an administrative mining right before the Jurisdictional Administrative Mining Authority (AJAM for its acronym in Spanish), as stated by the Mining and Metallurgy Law 535, dated May 28^th, 2014 (Law 535)

However, this general mining framework does not apply to Lithium, due to its strategic nature stated by the Bolivian Constitution and article 26 of Law 535, amended by Law 928: “Lithium and Potassium are declared as strategic elements, whose development will be carried out by YLB”.

Therefore, YLB is the only responsible for carrying out all activities of the production chain, which covers the prospecting, exploration, concentration, installation, implementation, start-up, operation and management, inorganic chemical complexes, as well as the industrialization and commercialization of Lithium in Bolivia. Only the subsequent “semi-industrialization, industrialization and waste processing processes of Lithium” may be carried out through association contracts with national or foreign private companies, as long as YLB keeps the majority participation¹⁰.

3. Participation of private parties in Lithium chain production

Although its clear that no private party, whether it’s a foreign or a domestic investor, has the right to participate in Lithium’s production chain, in 2021, YLB launched an International Tender for the Direct Extraction of Lithium (EDL for its acronym in Spanish). The project aimed to directly extract lithium from the brines of the Uyuni, Coipasa and Pastos Grandes salt flats.

After launching EDL, twenty companies applied for the bid, from which YLB selected eight companies based on the following metrics: (i) their technology; (ii) lithium recovery rate of at least 80%; (iii) possibility of reducing impurities in analyzed brines¹¹. According to YLB, the selection was made under a thoughtful evaluation and a transparent proceeding¹²

In 2023, YLB finally signed an agreement with CATL BRUNP & CMOC (CBC), one of the eight companies selected. CBC is a consortium formed by Contemporary Amperez Technology CO Limited (CATL), Guangdong Brunp Recycling Technology Co., Ldt. and CMOC Group Limited (CMOC). The agreement is willing to execute the installation of two industrial complex in Uyuni and Coipasa salt flats, with an approximate investment of USD 1.000 Millon. However, as of 2023 there is no information about the investment schedule, construction plan or business model of the EDL project to be executed between CBC and YLB.

1. National Minerals Information Center, US Geological Survey. Lithium Statistic and Information – Annual Publications, 2023.↩
2. Press Release YLB, July 21st, 2023.↩
3. Press Release, Fortune, April 21^st, 2023.↩
4. Solón, C. (2022). La industrialización del litio en Bolivia y la participación social.↩
5. Press Release, La Razón. January 25^th, 2023.↩
6. The National Evaporative Resources Management was created by COMIBOL Board by Resolution N° 3801/2008, dated April 3rd, 2008.↩
7. Bolivian Constitution, Article 369 (II) (2009).↩
8. All information from the plants were consulted here. ↩
9. Bolivian Constitution, Article 349 (2009).↩
10. Law 928, Unique article, section III (2017).↩
11. Final Report Results EDL, June 15th, 2022.↩
12. Press Release, YLB. January 31st, 2023.↩