Bolivia's ambitious push to harness its vast lithium reserves has raised alarms over the risks assumed by the state in agreements with foreign companies. 

Contracts with Russia's Uranium One Group (UOG) and China's CBC, a subsidiary of world-leading battery producer CATL, promise nearly $2bn in combined investments to construct advanced lithium carbonate plants near the Salar de Uyuni in Potosí. However, experts warn that the terms heavily favour foreign investors, leaving Bolivia to shoulder significant risks.

According to the Fundación Milenio, the deal with Uranium One is particularly concerning. The Russian firm will build the extraction plant but retains no obligation to operate it unless a separate agreement is signed. 

The $976mn project is set to use Russian Direct Lithium Extraction (DLE) technology, enabling the production of up to 14,000 tonnes of battery-grade lithium annually. This is a key step in Bolivia’s ambition to industrialise its lithium deposits, which are estimated to be the largest globally, at around 23mn tonnes.

State-owned firm Yacimientos de Litio Bolivianos (YLB), despite holding a 51% stake in the venture, must reimburse Uranium One for construction and exploration costs. Critics fear these provisions could weaken the country's bargaining power and sovereignty over its lithium resources.

“The question that must be asked is what will happen if UOG, for whatever reason, declines to operate the plant. Will YLB take over the operation? Will it look for another operator of a plant with Russian technology? And if it doesn’t find one? Even if such extremes do not occur, YLB’s negotiating position would be greatly damaged vis-à-vis the Russian company with obvious advantages to impose its conditions,” Fundacion Milenio's Director Henry Oporto told El Diario.

YLB President Omar Alarcón defended the agreements, emphasising that they ensure legal security and state control over lithium commercialisation. He also highlights the potential economic benefits of the $2bn investment. Yet, the contracts await legislative approval amid growing concerns over transparency and the practicality of untested direct lithium extraction (DLE) technology.

“Royalties are already established in the contracts [with UOG and CBC], they are the mining royalties at this time. The contracts are establishing an applicable law; which means that, if it changes in the future or a new law is passed, as in this case it is the royalties, the contract already provides for these modifications,” Alarcón said in a televised interview.

Bolivia’s policy to base its economic growth on industrial-scale extraction of lithium – a metal of strategic importance needed to build batteries for EVs – is a bold gamble. Yet the nation’s high-stakes agreements with Russia and China leave its "white gold" future on shaky ground.