Introduction

Lithium’s rapid growth in demand, combined with its distinctive silvery appearance, has earned it the nickname “white gold” (Cota, 2022). However, this term also carries a warning. Just as historical gold rushes have entrenched extractive and unequal economic relations, today’s scramble for lithium risks reproducing similar patterns, especially because many of the largest reserves lie in Global South countries with long-standing dependence on raw-material exports (Adegboye et al., 2024).

Nowhere is this tension felt more strongly than in South America’s “lithium triangle,” which spans northern Chile, northwest Argentina, and southern Bolivia, collectively holding more than half of the world’s known reserves (Sanchez-Lopez, 2019). This abundance offers these countries significant potential for economic transformation––if they can avoid the familiar dynamics of the ‘resource curse,’ which has long tied resource-rich states to foreign powers and extractive development models (Sanchez-Lopez, 2019).

Bolivia, home to one of the world’s largest lithium deposits, once saw its reserves as a unique opportunity for structural change (Sanchez-Lopez, 2019). Through an ambitious nationalization strategy centered on state-led extraction and industrialization, the country sought to leverage lithium as a pathway to economic growth, greater funding for social policies, and, more broadly, a break with historical dependencies on foreign powers (Al Bouchi & Caraway, 2023).

Lithium’s promise for Bolivia’s development

Once heralded as the future “Saudi Arabia of lithium” (Sanchez-Lopez, 2019, as cited in Chaudary, 2025), Bolivia is a particularly revealing case for examining governance challenges around critical minerals. The country holds an estimated 10.2 million tonnes of reserves, an endowment which has been associated with the hope of transformative economic change for one of South America’s lowest-income countries (Sanchez-Lopez, 2019; Al Bouchi & Caraway, 2023).

Historical roots of the resource curse in Bolivia

Lithium entered Bolivia’s political imagination as a rare chance to escape the pattern in which the country exported raw materials while capturing little of their value. Bolivia’s economy had been structured by the exploitation of natural resources since colonial times, beginning with gold and silver, followed by tin and later hydrocarbons (Cota, 2022). These sectors generated immense wealth but left producing regions impoverished, entrenched center-periphery inequalities, and fueled recurring cycles of internal political conflict (Al Bouchi & Caraway, 2023). As a result, the resource curse in Bolivia manifested not only economically, through volatility and dependency, but socially, where extraction deepened regional inequalities; for instance, underinvestment in public services in resource-rich regions contributed to major social uprisings such as the Cochabamba Water War (2000) and the Gas War (2003) (Al Bouchi & Caraway, 2023).

Lithium as a symbolic break from extraction-as-usual

It is against this backdrop that lithium was framed domestically as a chance to break from a history in which foreign companies profited while local communities bore the socio-environmental costs, such as water depletion and soil contamination in the Uyuni salt flats (Al Bouvhi & Caraway, 2023; Sanchez-Lopez, 2019). In the 1970s, the Bolivian government partnered with the Lithium Corporation of America (“Lithco”) to conduct exploratory work in the Uyuni salt flat (Johnson et al., 2024). Although the partnership ultimately collapsed, it generated early debates on resource control that would later shape the lithium nationalization agenda (Johnson et al., 2024). At the forefront of these debates were grassroots organizations from the lithium-rich region of Potosí, namely the Federación Regional Única de Trabajadores Campesinos del Altiplano Sur (FRUTCAS) and the Comité Cívico Potosinista (COMCIPO), which mobilized against the agreement on the basis that it replicated the deeply unequal models of benefit distribution that had defined Bolivia’s extractive history (Johnson et al., 2024).

These subnational struggles converged with a broader national reckoning over resource governance, particularly around the privatization of Bolivia’s state-owned oil and gas company in the early 2000s (Johnson et al., 2024). By the time Evo Morales was elected in 2005, lithium had become a symbol of sovereignty and anti-imperialism, reflecting efforts to assert national control over resources previously dominated by foreign firms, and regional justice for communities in the southwest long excluded from the benefits of extraction (Johnson et al., 2024). Morales, Bolivia’s first Indigenous president, ran on a platform grounded in Indigenous self-determination and the principle of vivir bien, a philosophy centering Mother Earth, harmony with nature, sustainable living, and autonomy (Al Bouchi & Caraway, 2023; Doyle, 2025; Obaya, 2021). Guided by these values, he implemented a template of resource nationalism, using various tools to increase state control over natural resource wealth while limiting the role of foreign firms, and vowed to keep the lithium sector out of foreign hands (Al Bouchi & Caraway, 2023; Obaya, 2021; Johnson et al., 2024).

Bolivia’s Path Toward Lithium Nationalization

With lithium positioned as both an economic and political asset, the Morales government set in motion the most far-reaching form of lithium resource nationalism in Latin America to date (Johnson et al., 2024). Lithium industrialization was incorporated as a state strategy and placed under the authority of state-owned institutions, beginning with the Corporación Minera de Bolivia (COMIBOL) and later the Gerencia Nacional de Recursos Evaporíticos (GNRE), which eventually became Yacimientos del Litio Boliviano (YLB) (Johnson et al., 2024). Guided strongly by FRUTCAS’s advocacy, the government decided that the initial stages of extraction and industrial processing would proceed without foreign partners, despite strong interest from multinational firms, and even downstream manufacturing would be limited to a 49% share for foreign ownership (Johnson et al., 2024).

The implementation of lithium nationalization involved 4 phases (Johnson et al., 2024, p. 8):

1. [T]he construction of pilot plants for lithium carbonate and potassium chloride;

2. [S]caling up the production of lithium carbonate and potassium chloride;

3. [P]roduction of lithium-ion batteries;

4. [… Establishing] private-public ventures […] for expanding industrial capacity with YLB maintaining a 51% controlling share

This technical strategy related to lithium was closely linked with broader structural change goals, increasing domestic value capture, reducing technological dependence on foreign powers, and repositioning Bolivia in global markets (Al Bouchi & Caraway, 2023).

Mixed outcomes and early constraints

Despite the coherence of its nationalization vision, Bolivia’s implementation has produced mixed outcomes (Obaya, 2021). While the state has achieved some industrial advancements, progress towards full industrialization has been slow and marked by various challenges that have dampened the initial enthusiasm for nationalization (Johnson et al., 2024). On the one hand, Bolivia succeeded in building key infrastructure, completing pilot plants, and developing new technical expertise (Obaya, 2021). Local engineers also created a lithium carbonate production technique (i.e., the sulphate method) tailored to the conditions of the Uyuni salt flat and achieved meaningful improvements in pilot-scale cathode production (Obaya, 2021).

On the other hand, YLB did not reach its targets for industrialization, borrowed billions from the Bolivian Central Bank for lithium ponds that remain under-utilized, and has been criticized for its lack of consultation with local communities whose livelihoods have been negatively impacted by the water extraction needed for lithium extraction (Johnson et al., 2024). These failures are influenced and compounded by the limiting geographical conditions of Bolivia’s salt flats, such as too-high levels of rainfall, humidity, and magnesium concentrations, which make lithium extraction more difficult (Johnson et al., 2024). They were also further impacted by the decreasing financial capacities of Bolivia due to the fall in prices of hydrocarbons and minerals between 2011 and 2016 (Obaya, 2021).

Contradictions between lithium sovereignty and socio-environmental concerns

Although the impetus for nationalization emerged largely from bottom-up demand, its implementation has encountered significant gaps between symbolic promises of sovereignty and the lived realities of extraction, causing friction with the same communities that initially supported the state-led lithium project (Aylwin, 2025).

Environmentally, lithium production threatens the fragile hydrological balance of the salt flats and generates chemical waste that can contaminate surrounding ecosystems and undermine local livelihoods (Al Bouchi & Caraway, 2023). These ecological pressures can translate directly into social harm: Indigenous groups dependent on quinoa cultivation, grazing, and other water-based subsistence activities risk being separated from the resources that sustain them as water is redirected toward industrial extraction (Al Bouchi & Caraway, 2023). Moreover, communities report that consultation processes fall short of good-faith engagement aimed at achieving consent, compromising their rights to self-determination, while compensation for damages is inconsistent and benefits remain unevenly distributed (Aylwin, 2025).

As summarized by Sanchez-Lopez (2019), these socio-environmental concerns and indigenous grievances “reveal the inconsistencies in the government’s ‘environmentalist indigenous’ discourse, as it clashes with the realpolitiks of extractive development” (p. 21). As such, it may replicate forms of green capitalism that fail to rupture the marginalizing force of extraction (Gustafson, 2020; Johnson et al., 2024).

Moderating nationalization: the return of foreignpartnerships

With geographical hurdles to production, diminished financial capacity, and a changing political landscape (with the ousting of left-wing Morales in 2019), Bolivia has since moderated its ambitious nationalization agenda and relaxed many of its limitations on foreign investment (Obaya, 2021; Johnson et al., 2024). In fact, 2024 saw a major agreement between YLB and the Chinese consortium CBC Investments, involving roughly USD 90 million for a new pilot project at Uyuni as part of a broader investment package worth around USD 1 billion (Vacano, 2024). A comparable partnership was established in late 2023 with the Russian company Uranium One Group for a pilot initiative in the Pastos Grandes salt flat in Potosí (Johnson et al., 2024).

These developments reflect a recalibration of Bolivia’s resource nationalism. While Bolivia continues to emphasize state ownership and sovereignty over its lithium resources, the practical challenges of large-scale production have made some degree of foreign participation unavoidable. In this sense, the return of foreign partners highlights the limitations of a nationalization strategy that depends primarily on ownership as a mechanism for structural transformation and autonomy.

Rather than abandoning the state-led lithium project, Bolivia’s approach increasingly represents a hybrid model in which foreign firms act as operational partners under state oversight. This shift reveals a central tension in contemporary resource governance, especially for countries historically plagued by the resource curse: even where political will to maintain national control over strategic resources exists, resource-rich states remain embedded within a global political economy where access to technology and capital remains unevenly distributed.

The resource curse in a decarbonization context

Bolivia’s lithium experience calls into question the assumption that critical minerals essential to the energy transition represent a clear break from past extractive development models. Despite lithium’s central role in decarbonization, its extraction remains embedded in global value chains that disproportionately benefit industrialized economies while concentrating environmental and social costs in resource-rich countries of the Global South. While decarbonization is often framed as a global public good, its material foundations rely on intensified extraction in regions historically shaped by social and environmental burdens. In this sense, lithium is not inherently different from earlier commodities such as silver, tin, or hydrocarbons. Without structural changes in how value is generated, governed, and distributed, lithium-led development can reinforce the very inequalities the energy transition purports to address.

Bolivia’s case also underscores the limits of resource nationalism as a response to the resource curse. State ownership can provide an important foundation for asserting sovereignty; however, ownership alone does not guarantee development outcomes. Without sufficient technological capacity, stable regulatory institutions, and access to finance, nationalized sectors may struggle to move beyond primary extraction. Bolivia’s partial pivot back toward foreign partnerships illustrates the governance challenge where nationalization without accompanying investments in institutional and technological capability fails to live up to the transformative potential that motivated it.

Conclusion

Lithium’s characterization as “white gold” captures both the promise and the peril at the heart of Bolivia’s experience. While lithium initially appeared to offer a break from extractive dependence through nationalization and state-led industrialization, its trajectory reveals how easily new commodities can reproduce old patterns defined by the resource curse. Bolivia’s partial pivot back toward foreign partnerships highlights that ownership alone cannot deliver structural transformation in the absence of technological capacity, institutional strength, and favorable positions in global value chains. In this sense, lithium has proven no automatic escape from the resource curse. Whether “white gold” becomes a vehicle for equitable development or a green rebranding of extractive inequality ultimately depends not on the mineral itself but on the governance arrangements that shape its extraction and use.