By Luis Fernando Valle – PPO Abogados
In a recent nationwide survey commissioned by a prominent Bolivian entrepreneur and conducted by a reputable firm, one issue stood out among the top ten concerns expressed by citizens: the mismanagement of natural resources. This response, emerging amid widespread anxiety over the ongoing economic crisis, reflects a growing frustration with how Bolivia handles its vast mineral wealth—and the missed opportunities that mismanagement represents.
Mining has shaped Bolivia’s economy and history since colonial times, beginning with the discovery of silver in Potosí’s Cerro Rico in 1545. Today, minerals like zinc, lead, and silver remain essential, accounting for approximately 28% of total exports in 2022, according to the National Institute of Statistics (INE). Despite volatility in global commodity markets, mining continues to provide jobs and significant fiscal revenues.
However, Bolivia’s 2009 Constitution marked a shift toward a more protectionist stance. It affirms that natural resources are the “direct, indivisible, and inalienable property of the Bolivian people,” and places their stewardship exclusively in the hands of the State. While the legal framework allows for private partnerships in exploration and extraction, it mandates that the State retain full control over ownership and strategic decisions, with all contracts subject to legislative approval.
These provisions were designed to ensure sovereign oversight and equitable benefit distribution—but in practice, they have created regulatory rigidity and deterred foreign investment. The lithium sector offers a prime example.
The Lithium Paradox: Abundant Reserves, Limited Output
Bolivia sits atop one of the world’s largest lithium reserves, with an estimated 21 million tonnes in the Salar de Uyuni alone. However, its strict legal controls have limited the country’s ability to capitalize on the global lithium boom.
In contrast, neighboring Chile and Argentina—also part of the “Lithium Triangle”—have adopted more flexible legal frameworks. Chile, the world’s second-largest lithium producer in 2022 (39,000 metric tons, per the USGS), has attracted foreign capital through investment-friendly policies. Argentina has taken a similar path, fostering public-private partnerships and rapidly scaling its lithium projects. Both countries are reaping the rewards in terms of foreign currency inflows and industrial development.
Bolivia, meanwhile, has lagged behind. Despite the establishment of Yacimientos de Litio Bolivianos (YLB) and recent agreements with international consortiums, commercial-scale lithium production has yet to take off. Investors remain hesitant, wary of the bureaucratic hurdles and political uncertainty.
Legal Reform and Strategic Partnerships: A Path Forward
Unlocking Bolivia’s mining potential requires more than rhetoric—it demands a shift in how the country partners with the private sector. The solution lies not in abandoning state sovereignty over resources, but in rethinking the mechanisms through which it is exercised.
Options such as service contracts, technology-testing agreements, joint ventures, and mining production partnerships offer models that preserve public ownership while leveraging private capital and expertise. For example, state-owned enterprises like COMIBOL or YLB could enter joint ventures in which operational control and profits are shared, but ownership of the resources remains with the State.
However, many of these agreements face delays or rejection during the approval process in the Plurinational Legislative Assembly. Even when contracts meet legal and technical standards, political dynamics can interfere. Legislators may stall approvals for political leverage or ideological reasons, generating uncertainty and discouraging foreign interest.
Proposed Legal and Institutional Reforms
To break this cycle and build investor confidence, Bolivia must pursue legal reforms that streamline and depoliticize the contract approval process. Key proposals include:
• Establishing clear timelines and criteria for legislative approvals. In certain cases, bypassing legislative review entirely if two conditions are met: (1) the State incurs no financial liability, and (2) national sovereignty and mineral rights remain protected.
• Strengthening institutional capacity by ensuring that technically competent and transparent officials lead the negotiation and oversight of complex agreements.
• Fostering public-private dialogue to build consensus on the strategic importance of mining projects, generating social buy-in and minimizing political friction.
Pilot projects that demonstrate successful outcomes—such as job creation, technology transfer, and export revenue—can also help build political and public support over time.
Conclusion: A Defining Moment for Bolivia
Bolivia stands at a crossroads. It holds vast mineral resources with the potential to drive sustained economic growth, but remains constrained by a legal and political framework ill-suited to today’s fast-moving global markets.
To unlock this potential, Bolivia must balance sovereignty with pragmatism. Legal reforms and innovative contract structures can respect the foundational principles of national ownership while creating a business environment that attracts the investment and innovation the mining sector desperately needs.
Without action, the country risks being left behind—watching others in the region extract value from a resource boom in which Bolivia, ironically, holds one of the strongest hands.
