MINING.COM series: Mining, power and a new US strategy in Latin America

[Ben Graham]

Latin America is entering 2026 with resources at the centre of a fast-moving geopolitical realignment, underscored by the US capture of Venezuela’s Nicolás Maduro.

For years, political risks for miners and explorers operating in South America for the most part had to do with changes to tax regimes and royalties, interference with permitting processes, or local government and citizen opposition. Only in rare cases were there outright property seizures, production halts or blanket bans on activity (and when it happened is was usually not permanent). 

Now the stakes are higher and the politics global: Governments and investors are focused on who controls critical minerals, which capitals have Washington’s backing, and how far states will go to secure supply chains that underpin everything from electric vehicles to weapons systems.

In a new series, MINING.COM will track the forces reshaping the region’s markets, examining Latin America through a geopolitical lens, where mineral-rich frontiers increasingly resemble security zones, and markets react as much to shifting alliances as to domestic election results.

In our first installment, we dig deep into Bolivia’s mining past, present and future — a country whose vast mineral wealth and shifting political tides make it a bellwether for where the region could be headed next.

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Bolivia’s lithium gamble tests new US alignment

Stretching more than 4,050 sq. miles of the Altiplano, Uyuni is the world’s largest salt flat. (Image courtesy of Pedro Szekely | Flickr Commons.)

Bolivia’s political trajectory shifted in November 2025 when President Rodrigo Paz took office, signalling a turn toward closer ties with the US after two decades of Socialist rule.

Paz’s centre-right, pro-business government is betting that Bolivia’s vast but underdeveloped lithium resources can help stabilize an economy strained by inflation, fuel shortages and dwindling dollar reserves. A pro-US tilt, officials hope, will unlock development finance, draw much-needed technical expertise into the country and forge new multi-lateral partnerships.

But analysts warn that geopolitics alone will not overcome Bolivia’s long-standing execution and governance challenges. 

Mariano Machado, Americas Principal Analyst at Verisk Maplecroft, told MINING.COM that Bolivia’s lithium contracts are “contracted but contested” — investable for early-stage work, but not yet bankable for large-scale project finance.

“Congress, courts and public pressure can still re-price deals midstream,” Machado said, noting that lenders are therefore likely to insist on phased drawdowns, escrowed revenues, step-in rights and political risk insurance rather than relying on sovereign assurances.

That caution, he added, is well grounded. Chinese and Russian direct lithium extraction (DLE) agreements signed in 2023–2024 collapsed into congressional turmoil in July 2025 and were later halted by court order.

Meanwhile, the state-owned lithium company YLB’s first industrial plant, opened in late 2023, is reportedly operating well below capacity, reinforcing what Machado described as an “execution-and-governance discount” on Bolivia.

Dreams of lithium riches

Bolivia holds some of the world’s largest lithium resources. According to the 2025 United States Geological Survey (USGS), the country has 23 million tonnes of identified lithium resources, about 20% of the global total — roughly double Chile’s.

The landlocked South American country has a history of shattered lithium dreams. It has tried and failed to develop its industry several times since the 1990s, producing only an accumulated 1,400 tonnes since 2018. 

The new government plans to open lithium projects to foreign capital, boost transparency around opaque contracts, certify resources through independent third parties and pursue broader economic reforms aimed at restoring investor confidence.

Analysts including Juan Ignacio Guzmán, CEO of Chile-based GEM Mining Consulting, warn that political promises alone are unlikely to shift sentiment without hard guarantees.

Guzmán told MINING.COM that investors will not commit capital without legal certainty, fiscal stability, and reliable mechanisms to resolve disputes, noting that international arbitration clauses are often a minimum requirement. 

Machado agreed, saying that while policy signals can improve sentiment, investment decisions ultimately depend on firm legal and fiscal foundations, including stable tax and royalty regimes, clear legislative authority, workable consultation and permitting processes, and credible dispute resolution—particularly given the risk of social unrest tied to Bolivia’s economic stabilization efforts.

“The moment fuel prices rise, and protests hit the streets is when governments test contract boundaries,” Machado said. He pointed to Paz’s emergency economic Decree 5503, which lasted less than a month from mid-December to early January before being replaced following nationwide protests after fuel prices jumped between 86% and 162%.

Several factors impede Bolivia’s ability to turn its vast lithium resources into bankable projects. High magnesium content, complex geology and costly logistics — including a more than 300-mile route to the nearest port — mean the US Geological Survey does not classify Bolivia’s resources as commercially viable.

Guzmán said the key technical barrier is the impurity profile. “The magnesium-to-lithium ratio in the case of Uyuni is around 20 to 1,” far higher than in Chile’s Salar de Atacama or Argentina’s Puna, “making extracting lithium from Bolivia much more expensive due to the necessary processing and more complex quality control required to achieve battery-grade lithium.”

YLB has recently moved to address that technical bottleneck on paper. On Jan. 23, it filed patent applications for a DLE process tailored to Uyuni’s high-magnesium brines, as well as an industrial design patent for a portable fast-charging lithium-ion charger. 

The filings build on a 2023 patent for high-purity lithium carbonate, but for investors and analysts they underline a familiar gap: Bolivia continues to generate intellectual property faster than it can translate it into reliable, bankable production.

Machado noted these challenges raise a larger strategic risk: timing. “The biggest risk is missing the lithium cycle,” he said. “Bolivia may win the politics but lose the timing.”

Uyuni’s high-magnesium brines, landlocked logistics and the need to prove extraction technologies —including DLE — at scale already stretch costs and timelines, he said. Combined with a volatile street environment and uneven state capacity, Bolivia risks arriving late to a market that increasingly penalizes delayed, high-friction entrants. By contrast, Argentina and Chile have spent years aligning their projects with investor and market expectations.

Markets remain skeptical. Federico Gay of Benchmark Mineral Intelligence said in a research note that even with regulatory improvements, Bolivia is unlikely to become a major producer before the end of the decade.

From a project finance perspective, Guzmán said existing agreements remain unbankable. “As long as the legal and social milestones that Bolivia require to assure investors that the investment will materialize into future cash flows are not in place, the contracts are not bankable,” he said. He added that deals with a Chinese consortium led by CBC and the uranium-linked agreement with One Group remain under international scrutiny amid political disputes and litigation risk.

Reform in motion

The government has moved to shore up its finances as it pushes for reform. La Paz has announced plans for a $3.1 billion loan from the Latin American Development Bank, and Economy Minister Marcelo Montenegro Aramayo has held talks with the International Monetary Fund, the Inter-American Development Bank and other multilateral lenders. Aramayo has declined to say how much support the US might provide.

Guzmán said US financing could help lower the cost of capital but flagged a key constraint: because major contracts are tied to Chinese and Russian partners, it is unlikely Washington would finance projects linked to those actors.

Verisk’s Machado said US support could still play a role if deployed carefully. A time-bound currency swap or other measures to ease near-term foreign exchange pressure and fuel shortages could help de-risk the macro environment without adding to sovereign stress, he said. But such support would not unlock lithium capital expenditure unless Bolivia pairs it with credible fiscal consolidation and an investable rulebook that attracts private capital through guarantees and political risk insurance.

The pivot marks a sharp break from the era of former president Evo Morales, who ruled from 2006 to 2019, expelled the US ambassador and counterdrug officials, nationalized the energy sector and maintained generous fuel subsidies. Those policies contributed to declining natural gas production, shrinking foreign exchange reserves and mounting fiscal pressure, while cheap fuel encouraged widespread smuggling to neighbouring countries.

Morales is now holed up in his rural Chapare stronghold to avoid arrest over allegations of statutory rape, which he denies. His successor, Luis Arce, was arrested in mid-December on corruption charges a month after handing over power to Paz; Arce also denies the allegations.

The new government has made reforming fuel subsidies a priority, aiming to stabilize supply and ensure subsidies reach small businesses and vulnerable groups rather than smugglers at the borders.

Beyond lithium, Bolivia hopes to revive its hydrocarbons sector, targeting an oil and gas bidding round in 2027. That plan hinges on passing a new hydrocarbons law and a separate lithium law this year to attract foreign investment.

Even if reforms advance quickly, Guzmán said Bolivia’s near-term impact on global lithium supply will remain limited. The country currently produces about 2,000 tonnes of lithium carbonate equivalent, he said. 

In a best-case scenario, output could rise to around 40,000 tonnes by 2030, which is still a small share of a market that is moving fast and leaving little room for late entrants.

The other gems in the crown

While lithium dominates the headlines, Bolivia’s near-term mining stability still comes from established silver and base-metal production.

The country’s largest modern operation is San Cristóbal, a major open-pit mine producing zinc-silver-lead concentrates, operated by Minera San Cristóbal. The nation also hosts key silver operations such as San Bartolomé, run by Andean Precious Metals (TSX: APM), through its subsidiary Manquiri, focused primarily on silver.

Among the most important advanced-stage polymetallic projects is Iska Iska, led by Eloro Resources (TSX: ELO), with a resource story anchored in silver and zinc, alongside meaningful tin and lead exposure—one of the few large development-scale pipelines in the country outside lithium.

Gold, meanwhile, remains structurally important but highly fragmented. Beyond industrial-scale plans, a large share of Bolivian production comes from cooperatives and smaller-scale operations, which can be economically significant but bring a different mix of regulatory and social risks. 

Still, the country has seen activity around potential industrial continuity, including Orvana Minerals’ (TSX: ORV) Don Mario asset, associated with gold (with copper/silver credits depending on ore).

The country’s mining outlook is likely to remain a two-speed story: silver and zinc provide continuity and cash flow, while lithium represents the transformational prize— one that will depend on the new administration’s ability to align investment rules, partner selection and social license with the scale of the industrial challenge.