Bolivians Push Back on ‘Worst Possible’ Lithium Deal With China and Russia

Shen Yun Performing Arts MC Leeshai Lemish speaks during a press conference over the recent fake bomb threat targeting the company at the John F. Kennedy Center for the Performing Arts, at the National Press Club in Washington on Feb. 21, 2025. Madalina Vasiliu/The Epoch Times

Widespread outrage has erupted in Bolivia over the details of contracts officials signed with Chinese and Russian companies to exploit the country’s vast lithium reserves.

Bolivians say the new agreements offer zero benefits for locals.

A constitutional and mineral rights attorney called the agreements made by state-owned energy company YLB the “worst possible deal” for the country.

A government press release announced the new arrangements with Hong Kong’s CBC Investment Limited and Russia’s Uranium One Group on Nov. 26, 2024.

However, officials didn’t initially make the contracts available to the public.

This raised red flags for many Bolivians, especially residents living in the department of Potosi, where the expanded lithium operations will take place in the Uyuni salt flat.

The agreement with China includes two new facilities and an anticipated production of 35,000 tons of lithium carbonate per year.

Russia’s operation expects to yield 14,000 tons of the mineral annually.

Omar Alarcón, the CEO of YLB, stated: “This contract ensures YLB’s ownership of the plants, guarantees a majority participation in the distribution of funds of 51 percent for YLB, and the marketing of the product is the exclusive property and responsibility of YLB.”

The Russian deal is broken up into several contracts, the full specifics of which aren’t currently available to the public. However, the local news outlet El Deber reported some of the details last September.

The report raised eyebrows and triggered suspicion among many locals who are used to Bolivia’s left-wing government being more transparent with foreign investment deals.

Some of the alleged questionable aspects of the Russian contracts include vague language regarding the transfer of ownership from Uranium One Group back to Bolivia and YLB’s assumption of the majority of the financial risk.

However, when the full details of China’s lithium contract surfaced last week, Bolivians quickly organized protests and called for action against YLB and President Luis Arce’s administration.

A worker uses a shovel to show the raw material for the manufacture of lithium carbonate inside a salt recovery pool at the Llipi pilot Plant in the Uyuni Salt Flats in Bolivia on Aug. 13, 2022. Gaston Brito Miserocchi/Getty Images

Bolivian attorney Benjamin Torres told The Epoch Times that YLB’s contract with China is “stealing” a precious resource from his nation while offering almost nothing to the people in return.

“Under this contract, there are no benefits for Bolivia,” Torres said, calling China’s lithium agreement the “worst possible deal.”

Grounds For Annulment

Torres explained that during the first phase, China will have the right to use the land for 36 years but is granted 42 years in total.

During this time, Bolivia is expected to provide all the energy requirements, such as gas and electricity, at its own expense.

“Bolivia also has to cover any additional costs of extraction and purification with the brine pools, so China is delivered an almost finished product,” Torres said.

He added China retains the right to break the contract at any time. However, if Bolivia does the same, they will have to repay the foreign investment up to that point plus 12 percent interest.

The department of Potosi—one of the poorest and least developed in the country—will only see 3 percent of the profits despite holding 100 percent of the Uyuni salt flat.

The other 48 percent of the profits from the China deal belongs to YLB, Torres said.

He added the operating costs alone create doubt as to why the government would enter such a detrimental agreement.

“The price for making all that [lithium] will be around $30,000 per ton. But guess how much the price of lithium [per ton] is nowadays? Only around $10,000. This doesn’t make any sense.”

According to the commodity insights group Fastmarkets, the price of battery-grade lithium per ton plummeted in 2024 due to the compounding effect of oversupply and the slowing of electric battery demand.

Last September lithium carbonate and hydroxide reportedly fell below $11,000 per ton for the first time since 2021.

Torres said if operating costs exceed profits, Bolivia could get stuck paying “ghost money” to break YLB’s contract with China.

He also thinks the new lithium deals with Hong Kong and Moscow could be a front for money laundering.

It wouldn’t be the first time a member of the current administration has been caught in a foreign money laundering scheme.

In 2022, former minister Arturo Carlos Murillo Prijic pleaded guilty to conspiracy to commit money laundering. The criminal charges involved a U.S. company trying to secure a contract with Arce’s administration.

Meanwhile, Torres is far from the only one asking why a business would be willing to operate at a loss.

“It doesn’t surprise me in the least. It’s like we’re just giving away our resources, and we’re not growing our country,” a Bolivian policy analyst, who asked only to be identified as Francisco, told The Epoch Times.

Francisco is a business owner and has worked with the civic committee in Santa Cruz. He said he’s tired of watching “inept officials” squander his country’s precious resources.

He pointed to months of fuel shortages, which have created long lines at gas stations throughout the country, as evidence that Arce’s administration can’t be trusted with resources.

Vehicles line up to refuel during a 24-hour transport strike due to fuel shortages in La Paz on Oct. 23, 2024. Aizar Raldes/AFP via Getty Images

Francisco said, “The MAS [Movement for Socialism Party] inherited one of the richest gas reserves in the world in the early 2000s, but no one knew how to run it like a business.”

Bolivia has considerable natural gas reserves and they became a point of serious conflict between government officials and the people 22 years ago.

Lengthy protests over the exportation of Bolivia’s natural gas—commonly known as the “gas war”—forced the administration of former president Sánchez de Lozada to step down in 2003.

Arce is the current head of the MAS party, which was previously led by former president Evo Morales when he came to power in 2006. Morales nationalized the country’s natural gas reserves the same year.

However, after years of declining production and government mismanagement, analysts predict officials will have to start importing natural gas by 2029.

“In a way, it’s sort of a slow-motion version of what happened in Venezuela in many ways. The results were a decline in investment in gas and reserves and eventually production,” Rice University’s Francisco Monaldi told the commodity insights group Natural Gas Intelligence (NGI).

Francisco said YLB’s lithium contracts are an example of a predictable pattern among leftist governments in Latin America: the nationalization of a country’s resources that ends with depleted production and debt.

Torres said Bolivians have a case for annulment of the contracts with China and Russia under law 221.

This law states that any public servant who enters a contract considered to be detrimental to the country can go to prison for up to 10 years.

The same law also applies to private individuals who sign a contract that’s considered harmful to the national economy, who could face up to eight years imprisonment.

In the case of the contested lithium agreements with China and Russia, Torres said that law 221 applies to the people who work in YLB, any secretaries or congressmen who approve it, and also to the president of Bolivia.

“People need to ask for the annulment of this contract in a legal way,” Torres said, adding the contracts were still waiting on Senate approval.

Former president of the Bolivian Mining Confederation Héctor Córdoba told the news outlet EFE: “The price of a ton of lithium carbonate is currently at $10,000 on the market, but the contracts indicate that they will sell between $26,000 and $29,000 per ton, which is serious for long-term planning and without clear objectives, the price varies.”

Córdoba also said the new lithium contracts could cause economic damage to the state.

Smoke and Mirrors

More than 30 institutions in Bolivia have reportedly denounced parts of the contracts that “are not clearly explained.”

Concurrently, residents in Potosi have wasted no time in organizing protests.

On Feb. 14, the president of Potosi’s Civic Committee, Alberto Pérez, announced public strikes of different durations. Protest marches have filled the streets of the department’s capital city, according to local reports.

Demonstrators holding signs with slogans like “lithium belongs to Bolivians” have been a regular sight over the past week.

Yet Francisco says public outrage over the new lithium contracts may be a smokescreen for something else.

An example of this happened during the media storm of Morales fleeing Bolivia in 2019 over evidence of election fraud.

He was accused of fleeing the country with millions of dollars stolen from Bolivia’s central bank, which was later debunked.

However, an investigation revealed millions of dollars actually had left the central bank between Nov. 7 and Nov. 8, which was allegedly funneled into five public projects without any further details.

It’s worth noting this large and mysterious money transfer happened the same week Morales stepped down from the presidency in 2019.

Bolivian politicians are often accused of shadowy maneuvers due to a long history of public officials stealing money from the people.

Now Arce’s embattled and deeply unpopular regime faces an election in August.

Francisco and Torres believe the new lithium deals would be an ideal opportunity for officials to pocket a lot of money before potentially leaving office.