Bolivia Taps BRICS For Raising $2 Billion, Targets Its Vast Lithium Riches

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Zinger Key Points
  • Bolivia secures $2 billion from Russia and China to secure 49,000 tons in annual lithium production capacity.
  • Regional leaders seek responsible mining, while foreign academics question effective governance in the sector.

Bolivia, the owner of the world's largest lithium reserves, is trying to capitalize on this valuable resource. Despite prices plummeting from 2022 highs, the country is pushing forward with large-scale investments to take advantage of the growing battery industry.

"With the two new contracts, we plan to reach 49,000 tons of lithium carbonate annually within three years," Omar Alarcon, president of Bolivia's state-owned lithium company Yacimientos de Litio Bolivianos (YLB) told Bloomberg.

YLB's deals with Russia's Uranium One Group and a Chinese consortium totaling nearly $2 billion. The agreements include the construction of three processing plants. The Russian-backed facility is set to produce 14,000 tons annually, while the Chinese partnership aims to add 35,000 tons.

Despite holding an estimated 21 million tons of lithium beneath the Uyuni salt flat in the southern region of Potosí, Bolivia's current production is negligible.

Key challenges include the high altitude of its deposits, the logistical constraints of being landlocked, and a high concentration of magnesium in its brine, which complicates extraction.

Together, these hurdles make the production at current prices of around $10,000 per ton barely viable. To address these obstacles, the government is banking on direct lithium extraction technology, which promises to reduce processing times and increase efficiency.

While Bolivia's ambitions are laudable, environmental concerns loom large. Last year, Potosí Senator Elena Aguilar voiced concerns over water usage for Mongabay.

"We want to see the industrialization of lithium, but it has to be done responsibly for the sake of our natural resources." A 2024 inspection by the Regional Federation of Workers and Peasants of the Southern Altiplano found operational inefficiencies at existing facilities. Equipment at a lithium carbonate plant remained unpacked, and power shortages were hampering progress. Moreover, a potassium chloride plant, designed for 350,000 tons of annual production managed only 80,000 tons, raising doubts about Bolivia's industrial readiness.

Still, the industry's problems extend far beyond emerging markets. A research paper by Johnson, Park, and Kramarz critiques the lack of credible governance mechanisms in the lithium sector, pointing out that voluntary and hybrid regulatory measures often fail to prevent environmental harm or ensure community participation.

The authors stress that effective governance must include stringent monitoring, local engagement, and enforceable penalties for non-compliance—a long shot for a country such as Bolivia, which boasts a Corruption Perceptions Index of 29, the sixth-worst in the LATAM region.

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