Why a Lithium Partnership with Bolivia Is Strategically Crucial for Germany and Europe

Europe’s lithium dilemma – Bolivia’s unique role

Since President Rodrigo Paz Pereira took office in November 2025, Bolivia has entered a phase of profound political and economic transformation. This is not merely a change of government, but a systemic shift – a clear break with the ideologically driven economic and resource policies of past decades. The new government is opening the country to international cooperation, strengthening state institutions, and focusing on economic modernisation instead of on political isolation.¹

This momentum marks more than a programme of political reform: Indeed, it creates a historically rare window of opportunity for a genuine fresh start in the lithium sector. For the first time, political willingness to reform, social openness, and technological feasibility are converging. This situation enables what once seemed unthinkable: namely the development of a modern, transparent, and internationally integrated lithium model that could give Bolivia and its partners an entirely new role in global value chains.²

This political shift provides the framework within which Bolivia’s exceptional lithium deposits must now be reassessed: The country possesses the world’s largest-known reserves, estimated at around 21 to 23 million tonnes. This extraordinary concentration of a key raw material for the energy transition makes Bolivia a geopolitically pivotal country. The most significant deposits are located in the Salar de Uyuni – the world’s largest salt flat – as well as in the neighbouring salt flats of Salar de Coipasa and Pastos Grandes. These geological resources are remarkable, yet they have been only inadequately developed to date – a paradoxical situation given rising global demand for lithium for batteries, electric vehicles, energy storage systems, and digital devices.³

The EU officially classifies lithium as a strategic raw material and lists it as particularly security-relevant under the Critical Raw Materials Act (CRMA).⁴ This classification is not merely technical; rather, it also reflects a geopolitical reality: The EU remains heavily dependent on imports, particularly from China, which controls large parts of global lithium processing. The European Commission is fully aware of this strategic risk and has begun taking concrete steps through the RESourceEU initiative⁵ and the CRMA in order to strengthen supply security, diversify supply chains, and reduce dependence on geopolitical rivals.⁶

Europe’s new raw materials strategy: Reducing geopolitical vulnerability

The European Union is currently fundamentally reshaping its raw materials policy – a step that appears long overdue in light of geopolitical tensions, growing industrial demand, and global dependencies. Through the RESourceEU initiative, the EU aims to make its supply of critical raw materials more resilient, sustainable, and strategically independent. Brussels is pursuing a combination of domestic value creation, global partnerships, and close coordination with the international investment initiative Global Gateway.⁷

At the heart of the EU’s new raw materials strategy is the ambition to increasingly process and secure scarce and geopolitically sensitive resources within Europe itself, including rare earths, lithium, and cobalt. In order to achieve this, recycling rates are to be significantly increased, battery materials more efficiently recovered, and new processing and extraction capacities developed. The strategy additionally seeks to reduce dependence on imports – especially from China – and to strengthen the resilience of European industry.⁸

Alongside the expansion of European capacity, the EU is placing particular emphasis on international cooperation. Partnerships with resource-rich countries such as Australia, Canada, Chile, Kazakhstan, and Ukraine are to be deepened in order to place the extraction and processing of critical raw materials on broader and more reliable footing. The aim of these partnerships is not only to ensure raw material security, but also to promote fair trading conditions, sustainable extraction, and long-term industrial cooperation.

The European global development initiative Global Gateway has a key role to play in this endeavour. As a global investment strategy, it combines European foreign and infrastructure policy and mobilises public and private funding in order to support infrastructure projects worldwide in the areas of transport, energy, digitalisation, health, education, and research. This linkage is crucial for Europe’s raw materials strategy: Through Global Gateway, the EU can invest strategically in raw material-related infrastructure, including ports, transport corridors, energy facilities, and local processing plants in partner countries. This allows supply chains to be diversified while also supporting sustainable local value creation. At the same time, the RESourceEU programme emphasises that Europe needs international raw materials partnerships in order to reduce dependence on geopolitically risky supply chains and to build stable relations with countries that are crucial to European supply security. The EU has therefore announced that it will make three billion euros available for targeted raw materials investments, including projects of high relevance to Bolivia.

The global race for lithium

Lithium is considered a strategic raw material because it is key to both the global energy transition and digitalisation. As a core component of modern lithium-ion batteries, it is indispensable for electric vehicles, stationary energy storage systems, and a wide range of mobile devices – sectors that are expanding rapidly worldwide. At the same time, supply remains constrained: Economically viable deposits are geographically concentrated, particularly in Australia, Chile, Argentina, and Bolivia, thereby creating geopolitical dependencies. At a time when many countries are redefining their energy and industrial policies, access to lithium is becoming crucial for technological sovereignty, innovative capacity, and the competitiveness of entire economies, thereby turning this resource into a strategic instrument of power.⁹

Since control over critical raw materials will decide who determines the standards and technologies of the energy and transport transition in the future, lithium is not merely an industrial resource: Indeed, it is also a strategic factor in the wider competition between China, the United States, Europe, and emerging powers such as India and South Korea.¹⁰

Since the EU already sources more than 80 per cent of its lithium precursor products from China, and given that much of the battery value chain is also located there, lithium has become a geopolitical risk factor for Europe. The EU has recognised this danger and is working intensively to establish new, reliable partnerships in order to diversify and strengthen the resilience of its supply chains. Bolivia has a key role to play in this context because despite all the challenges, no other country offers comparable resource potential.

Why Bolivia’s potential has thus far remained untapped

Bolivia could play a major role in this global competitive environment. The country possesses the world’s largest lithium deposits, yet it has hardly benefited from this potential over the past decades, and no significant lithium production industry has been successfully established to date. There are several reasons for this.

For one thing, Bolivia has long struggled to make lithium extraction economically viable. One major reason lies in the geochemical characteristics of Bolivian brine: Its high magnesium content makes conventional evaporation methods far less efficient and more expensive than is the case with Chilean and Argentine deposits. In addition to the difficult geochemical structure of the brine, inadequate infrastructure in the remote regions of the Bolivian Altiplano has also prevented the country’s lithium wealth from being fully exploited.¹¹

More serious than the technical and logistical hurdles, however, are the political factors that have thus far prevented Bolivia from building up lithium production on a scale comparable with that of its neighbours Chile and Argentina. For decades, an ideologically driven state lithium policy, political instability, regional conflicts, institutional weaknesses, and social protest movements have hindered the development of the lithium sector, thereby leaving Bolivia largely absent from the global lithium market despite the country’s substantial resources.¹²

The main reason for the failure of Bolivia’s lithium strategy to date lies in the decades-long ideological approach to resource policy pursued by the socialist governing party Movimiento al Socialismo (MAS). In line with the state-centred logic of the government of Evo Morales (2008–2019), the idea was for the state to control the entire value chain – from brine extraction to battery production. Legal frameworks such as the Ley de Minería y Metalurgia (2014) and the Ley de YLB (2017) established a complete state monopoly that did not integrate private or foreign investors, thereby effectively excluding them altogether. This structure soon proved to be a structural trap, thereby creating a system that was both financially overstretched and organisationally and technologically overwhelmed.¹³

The technological overconfidence of the MAS governments became especially evident in the ambitious promise not only to extract lithium, but also to manufacture batteries domestically. The vision was compelling: A country that had exported raw materials for centuries would now – for the first time – place a high-tech product within global value chains. However, this vision soon clashed with the industrial reality. The state-run factories – some financed with well over two billion US dollars from foreign currency reserves – later proved technically inadequate. Several plants were reportedly “inviables” – that is, not operationally viable at all – a bitter verdict after years of investment. The state-owned potassium chloride plant operates at only around one-quarter of its planned capacity, while the lithium carbonate plant barely reached 20 per cent capacity at launch. For this reason, analysts describe the Bolivian lithium model under the MAS governments as a failed political experiment that had never progressed beyond the pilot stage.¹⁴

The MAS government under Luis Arce (2020–2025) continued to intensify the ideological orientation of Bolivia’s lithium policy. Recognising the limited technological capacity to establish a fully domestic lithium industry all the way through to battery production, Arce did seek international partners – but only within his own ideological sphere.

Bolivia aligned its lithium policy closely with geopolitical partners such as China and Russia. The agreements with the Chinese company CATL and the Russian state enterprise Uranium One were concluded at a time when the MAS governments were deepening their traditional distance from the United States and increasingly turning towards authoritarian allies. In so doing, Arce opted for new direct extraction technologies from China and Russia that were embedded in a foreign policy environment that had for years been defined by anti-imperialist rhetoric and the ambition to pursue major economic projects outside “Western spheres of influence”. Critics argued that the agreements had been concluded behind the backs of regional stakeholders¹⁵ and reflected a geopolitically motivated preference for two states that were actively seeking to expand their global influence through investments in critical raw materials.

Central role of the local population

When concluding their lithium agreements, Bolivia’s MAS governments repeatedly excluded key local stakeholders, thereby triggering considerable discontent in the affected regions. As early as in 2019, a joint German–Bolivian lithium extraction venture collapsed after President Evo Morales had withdrawn his previously expressed support in response to massive resistance from the local population, which felt sidelined and distrusted the process in the context of the election campaign.¹⁶ However, the protests against the joint German–Bolivian venture should not be misinterpreted as a fundamental rejection of Europe: Indeed, they were directed primarily at the lack of transparency and the insufficient involvement of local communities – a structural problem that later also arose in connection with projects involving China and Russia. As such, the conflict revolves less around specific partners than around the question of how inclusive and transparent the projects are designed to be.

In the years that followed, the government and the state lithium company YLB increasingly disregarded the legally required consultations with indigenous communities and left environmental impact assessments incomplete. The consequence involved protests, particularly around the Salar de Uyuni salt flat, where indigenous organisations such as CUPCONL had barred companies from entering their territories and accused the government of systematically ignoring their interests.

The growing resistance ultimately led to a political and legal deadlock that affected all new lithium agreements. In 2024 and 2025, MAS governments negotiated billion-dollar contracts with Russian and Chinese corporations, but nationwide protests, turmoil in parliament, and judicial interventions stopped these contracts from being implemented. Courts ordered precautionary measures and blocked parliamentary consideration of the contracts because the affected indigenous communities had not been consulted and sufficient environmental studies had not been carried out. At the same time, demonstrations, local popular assemblies, and pressure from Potosí prevented the projects from moving forward.¹⁷ As such, the more recent contracts followed the same pattern that had caused the German–Bolivian joint venture to fail in 2019: a lack of transparency, the sidelining of the local population, and the resulting social mobilisation, which had ultimately put a stop to all previous lithium agreements.

Demands of indigenous communities

In substantive terms, indigenous and rural communities articulate three non-negotiable concerns¹⁸:

1. Water as a lifeline: Access to non-renewable fossil aquifers is the most sensitive issue in this arid highland region. The demands concern water baselines, open data, community monitoring using bioindicators, and robust rules for the reinjection of residual brines. Every form of technology – be it evaporation or direct extraction – is to be judged by its water, chemical, and energy profile.
2. Participation and value creation: Fiscal revenues must be felt locally, including revenue-sharing arrangements for regions, municipalities, and indigenous territories (TIOC) as well as local procurement, training, employment, and investment in healthcare, water infrastructure, and sustainable tourism.
3. Cultural and ecological integrity: The Salar de Uyuni is not only a raw material deposit, but also a tourist magnet and habitat for animals such as flamingos. Projects that are not ecologically viable endanger the region’s identity and income.

A political turning point in La Paz and a geostrategic window

The change of government to President Rodrigo Paz Pereira in 2025 has fundamentally changed the political atmosphere, with a new openness, a willingness to cooperate internationally, and a pragmatic reform agenda now determining Bolivia’s positioning. Regarded as a moderate figure who seeks to overcome decades of polarisation in Bolivian politics, Paz has declared the country’s economic modernisation a priority. His approach is significantly more business-friendly and internationally oriented than that of his predecessors.

The Paz government views the lithium sector as a key instrument for stabilising an economy that has been in crisis for years.¹⁹ At the same time, it knows that sustainable development is only possible if the country does not enter into new dependencies. This has led to a rare convergence of interests between Europe and Bolivia: Bolivia’s government is seeking diversified partnerships in order to overcome the economic crisis and avoid becoming one-sidedly dependent on China or Russia. The EU, in turn, aims to strengthen its raw materials security while positioning itself more independently in geopolitical conflicts.

The opportunities for Europe are all the greater because Bolivia finds itself in a situation in which it depends economically and politically on reliable partnerships. Europe offers a combination of technology, financial support, governance expertise, and long-term partnership that Bolivia perceives as attractive and stable.²⁰

In addition, China and Russia are coming under increasing pressure in Bolivia. Several lithium agreements signed by their companies in recent years have triggered domestic political controversy. In Potosí in particular, protests have occurred against agreements with Chinese and Russian companies, which have been accused of lacking transparency and offering insufficient benefits to the local population. This situation has led to a lasting crisis of confidence vis-à-vis China and Russia.²¹

For Europe, this development opens up a strategic window of opportunity: Compared with Chinese and Russian actors, European investors enjoy a better reputation in Bolivia because they are perceived as more rules-based, transparent, and sustainable. The EU and its member states are regarded as partners committed to long-term development rather than to short-term extraction – an approach closely associated with European development cooperation, the rule of law, and governance standards. In its partnership documents, the EU delegation in Bolivia explicitly emphasises that European support focuses on democratic institutions, sustainable resource management, and green transformation, thereby complementing Bolivia’s development needs.²²

Why Europe is the right partner

Partnership with Bolivia entails not only opportunities, but also risks since Bolivia’s political and social environment remains volatile. This domestic instability poses a challenge for foreign investors and partner states. At the same time, however, it demonstrates how important it is for a partner such as the EU to play an active role in Bolivia since the EU attaches particular value to the rule of law, transparent procedures, and participatory processes.

Europe has many years of experience in cooperating with countries undergoing transformation processes, and it possesses instruments capable of strengthening institutional capacities, involving local communities, and defusing conflicts. With the lithium roadmap,²³ which has attracted considerable attention in Bolivia, the EU has already made a concrete contribution to consultation with local communities; ongoing programmes complement this contribution through initiatives in environmental protection, social inclusion, and governance.

Europe also offers something Bolivia urgently needs: industrial value creation. Unlike many resource powers, the EU does not pursue short-term resource extraction, instead supporting long-term cooperation that additionally includes investment in local production and processing. The Global Gateway strategy underlines this approach by explicitly focusing on sustainable infrastructure, institutional strengthening, and value creation within partner countries. This difference is not merely economic: Indeed, it is also significant geopolitically. For Bolivia, partnership with Europe means a greater degree of political independence and technological modernisation; for Europe, meanwhile, it means the opportunity to secure a stable and reliable source of raw materials while simultaneously promoting a sustainable, long-term industrialisation model. In this respect, Europe differs significantly from China, which – despite investing heavily – relocates most value creation back into its own industrial system.

The technological factor: Direct lithium extraction as a source of geopolitical leverage

Bolivia’s political realignment coincides with a technological advance that for the first time makes the economic development of its deposits feasible. Modern direct lithium extraction technologies (DLE) enable lithium to be extracted sustainably and efficiently, even from magnesium-rich brines such as those found in Bolivia. Whereas conventional evaporation methods require years-long processes and are heavily impaired by the high magnesium content of Bolivian brines, DLE technology enables direct extraction that is both more environmentally sustainable and economically viable.²⁴

European companies such as Vulcan Energy Resources have successfully carried out corresponding pilot projects together with EAU Lithium and the state-owned YLB, thereby confirming the technical feasibility of the approach.²⁵ This technological development is not merely a scientific breakthrough; rather, it is also significant geopolitically. While reducing China’s technological advantage in lithium processing, the development opens up a shared opportunity for Bolivia and Europe to create a sustainable lithium model. The EU actively supports these projects diplomatically, as demonstrated by the presence of European ambassadors at contract-signing ceremonies.

This technological basis is crucial because it offers Bolivia genuine industrial prospects for the first time. DLE could enable the country to play a role not only in raw material extraction, but also in downstream processing that goes far beyond the previous model of merely exporting raw materials. For Bolivia, this would create the opportunity to establish value chains within the country itself – a vision pursued by many Bolivian governments for decades, but one that has repeatedly failed due to a lack of technology and insufficient international partnerships.

A fly in the ointment: A window of opportunity fraught with risk

Promising though the current momentum may be, the success of a European lithium partnership with Bolivia is by no means guaranteed. The political, social, and geopolitical conditions are simply too fragile. Domestically, Bolivia remains politically volatile. President Rodrigo Paz stands for openness and reform, but his agenda is by no means irreversible. The still-influential MAS retains a stable base in society and – in the event of a change in political leadership – could attempt to return to the more state-centred resource policy of previous years. In such a scenario, existing agreements could be reopened that range from renegotiations to political obstruction. For Europe, this would considerably increase the already-substantial investment risks.

A second factor is equally crucial: the role of the local population. The past has repeatedly shown that lithium projects fail less because of technical obstacles than because of social resistance. Without credible participation, transparent procedures, and visible benefits for the affected regions, protests, legal interventions, and project suspensions are likely.

Geopolitically, the partnership also exists within a broader strategic context. Alongside China, the United States may additionally attempt to expand its influence in Latin America in order to secure access to critical raw materials. It thus remains unclear whether Europe can establish Bolivia as a long-term exclusive partner or whether a new competition will emerge in which political and economic spheres of influence are renegotiated.

Ultimately, major challenges also exist on the European side. Ambitious strategies such as the CRMA and Global Gateway often come up against slow decision-making processes, regulatory hurdles, and limited risk appetite. Europe recognises the strategic pressure to act, but whether it is able to do so quickly and decisively enough remains uncertain: Success depends less on the availability of lithium than on political continuity, social acceptance, and geopolitical effectiveness.

Strategic convergence: Why both sides need each other

Europe is systematically seeking new sources of supply, while Bolivia is deliberately diversifying its partnerships. This creates an unusually favourable basis for cooperation. Bolivia needs technology, capital, and international legitimacy in order to expand its role in the global lithium market. Europe needs lithium – and large quantities of it – in order to decarbonise its energy systems, to keep its industry competitive, and to reduce its dependence on China.

In conclusion, a nuanced picture emerges: Bolivia and Europe stand at a historic juncture – not on solid ground, but rather on shifting terrain. The political opening in Bolivia, criticism of existing partnerships with China and Russia, the technological maturity of European DLE technology, and the geopolitical pressure facing Europe together create a rare window of opportunity for cooperation. At the same time, the success of this partnership depends crucially on whether political stability can be secured, public acceptance ensured, and competitiveness maintained in the international arena.

If Europe acts decisively while remaining politically sensitive, it can not only secure its own supply chains, but also contribute to a more sustainable and equitable raw materials order. The conditions are in place – but success is by no means guaranteed. The key question is therefore not whether partnership is possible, but whether it can be made sustainably viable under difficult conditions.

– translated from German –

Dr Christina Stolte is Head of the Konrad-Adenauer-Stiftung’s Bolivia Office.

1. Stolte, Christina 2025: Rodrigo Paz’s election victory heralds a new era, Country Reports, Konrad-Adenauer-Stiftung, 20 Oct 2025, in: https://ogy.de/duka [27 Mar 2026]. ↩︎
2. Blair, Alex 2026: New president, new policy: Bolivia’s shift against lithium protectionism, Mining Technology, 30 Jan 2026, in: https://ogy.de/gi8l [27 Mar 2026]; de Vicente, Agustín 2025: Bolivia’s new president rekindles cautious hope for long-stalled lithium dreams, Mining Reporters, 23 Oct 2025, in: https://ogy.de/y1c0 [27 Mar 2026]. ↩︎
3. European Commission 2025: Strategic Raw Materials. Lithium – battery grade, in: https://ogy.de/9z1k [31 Mar 2026]. ↩︎
4. European Union 2024: Regulation (EU) 2024/1252 of the European Parliament and of the Council of 11 April 2024 establishing a framework for ensuring a secure and sustainable supply of critical raw materials and amending Regulations (EU) No 168/2013, (EU) 2018/858, (EU) 2018/1724 and (EU) 2019/1020, EUR-Lex, 3 May 2024, in: https://ogy.de/8hj5 [31 Mar 2026]. ↩︎
5. Directorate-General for Communication 2025: New measures to secure raw materials and strengthen the EU’s economic security, European Commission, 3 Dec 2025, in: https://ogy.de/4c21 [31 Mar 2026]. ↩︎
6. Ibid. ↩︎
7. European Commission / High Representative of the Union for Foreign Affairs and Security Policy 2021: Joint Communication to the European Parliament, the Council, the European Economic and Social Committee, the Committee of the Regions and the European Investment Bank. The Global Gateway, 1 Dec 2021, in: https://ogy.de/u215 [31 Mar 2026]. ↩︎
8. Bille, Bryan 2024: Increasing Lithium Supply Security for Europe’s Growing Battery Industry: Recommendations for a Resilient Supply Chain, The Hague Centre for Strategic Studies, 22 Jan 2024, in: https://ogy.de/43vz [31 Mar 2026]. ↩︎
9. von Vacano, Diego 2025: The Geopolitics of Lithium in 2025, The National Interest, 10 Feb 2025, in: https://ogy.de/d74n [19 May 2026]. ↩︎
10. Licata, Olivia 2024: Securing Critical Minerals Amid U.S.-China Rivalry: Leveraging Latin American Lithium to Mitigate Supply Risks, Center for Global Security Research, Aug 2024, in: https://ogy.de/3gdy [19 May 2026]. ↩︎
11. Käufer, Tobias 2025: Kampf um größten Lithium-Schatz der Welt, ZDFheute, 25 Jul 2025, in: https://ogy.de/tnam [31 Mar 2026]. ↩︎
12. Ruvenal, Caio 2025: El accidentado camino del litio en Bolivia: 17 años de promesas de un desarrollo económico que no despega, América Futura, El País, 3 Jun 2025, in: https://ogy.de/rro5 [31 Mar 2026]. ↩︎
13. Fundación Jubileo 2024: Consultoría: Situación y perspectivas de la explotación del litio en Bolivia, 8 Oct 2024, in: https://ogy.de/6ezj [27 Mar 2026]. ↩︎
14. Fundación Milenio 2025: El litio en la Economía de Bolivia: paradigma de un gigante dormido y la fiebre del “oro blanco”, 3 Oct 2025, in: https://ogy.de/dolf [27 Mar 2026]. ↩︎
15. Belmonte, Marco Antonio 2025: Jubileo y 36 organizaciones de la sociedad civil cuestionan contratos de litio y sostienen al menos 6 observaciones, Visión 360, 13 Feb 2025, in: https://ogy.de/v9mb [27 Mar 2026]. ↩︎
16. Fernández, Freddy Lacio 2025: Litio en disputa: Defensoría frena contratos y Arce advierte un bloqueo político, El Deber, 21 Aug 2025, in: https://ogy.de/zpl9 [27 Mar 2026]. ↩︎
17. Belmonte 2025, n. 15. ↩︎
18. El Potosí 2026: Comcipo convoca a precumbre del litio para unificar ley sectorial, 27 Feb 2026, in: https://ogy.de/mfde [31 Mar 2026]. ↩︎
19. Blair 2026, n. 2. ↩︎
20. Mamani Cayo, Yolanda 2026: El litio de Bolivia aún anima a Europa; Alemania pone condiciones sociales, El Deber, 6 Feb 2026, in: https://ogy.de/baas [31 Mar 2026]. ↩︎
21. Fernández 2025, n. 16. ↩︎
22. European Commission: Bolivia, International Partnerships, in: https://ogy.de/4azh [27 Mar 2026]. ↩︎
23. European Union 2026: Roadmap for cooperation on critical raw materials and lithium, in: https://www.distillednews.eu/article/external_260206_eu_cooperation_bolivia_11m [27 Mar 2026]. ↩︎
24. IDTechEx: Direkte Lithiumgewinnung 2025–2035: Technologien, Akteure, Märkte und Prognosen, in: https://ogy.de/396j [31 Mar 2026]; Fraunhofer-Institut für physikalische Messtechnik IPM 2025: Effiziente Lithiumgewinnung durch innovative Messtechnik, press release, 26 May 2025, in: https://ogy.de/mqc8 [31 Mar 2026]. ↩︎
25. Estremadoiro Flores, Ernesto 2026: Empresa australiana EAU Lithium firma acuerdo de negociación con YLB para avanzar en proyectos de litio, El Deber, 18 Feb 2026, in: https://ogy.de/xyz3 [31 Mar 2026]. ↩︎