Bolivia at a Crossroads: Lithium, Gas, and the Search for Economic Stability After the 2025 Election

John Price
Managing Director
AMI

Bolivia’s August 2025 presidential elections have ushered in a new era of political disruption and economic urgency. After two decades dominated by the Movement Toward Socialism (MAS) party, voters have shifted the political landscape toward candidates promising reforms in the management of the country’s most strategic resources: lithium and natural gas. The outcome of these elections will determine whether Bolivia finally unlocks its vast lithium reserves and revives its faltering gas industry—or remains mired in stagnation.

With foreign reserves nearly depleted, a looming currency crisis, and dwindling natural gas production, Bolivia cannot afford indecision. Investors, neighbors, and local communities are all watching closely to see whether the next government can overcome entrenched political habits, recalibrate state control, and open the doors to the kind of investment that could stabilize the economy.

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The Promise and the Paralysis of Lithium

Bolivia sits atop what geologists call the ‘lithium triangle,’ a region spanning Chile, Argentina, and Bolivia that contains more than half the world’s known reserves of the metal critical to electric vehicle batteries and renewable energy storage. Of the three, Bolivia is believed to hold the largest single deposit, concentrated in the Salar de Uyuni salt flats, but remains the least developed producer.

The central barrier has been political rather than geological. Under MAS governments, lithium was treated as a symbol of sovereignty, with the state-owned company Yacimientos de Litio Bolivianos (YLB) monopolizing exploration and production. Foreign firms were welcomed only on condition that they form joint ventures with the state, accept rigid technology-transfer obligations, and deliver high revenue shares. The result has been predictable: projects stalled, foreign majors stayed away, and Bolivia missed out on the lithium boom that has begun to enrich its neighbors.

The 1^st and 2^nd past the post of the first Presidential election results, who will face one another for the Presidency on October 19^th are former president Jorge Quiroga on the right and centrist Rodrigo Paz. Quiroga calls for loosening the state’s grip, presumably giving free reign to private capital to invest in both lithium and natural gas. Paz, by contrast, maintained in his campaign that Bolivia should guard against ‘foreign exploitation,’ though he emphasized transparency and consultation. His position on foreign investment might very well change if he wins, inheriting a fiscal mess and two extractive industries that are in desperate need of modernization. 

For international miners, the signal is clear: Bolivia is ready to move closer to Chile and Argentina’s models, where private companies—under well-defined royalty and tax regimes—have driven investment and production in lithium. Still, whether joint ventures are eliminated outright or transformed into more flexible partnerships remains the key test of political will.

Conditions Investors Will Demand

The appetite for lithium is immense, but so too are the demands of serious investors. Multinationals with stakes in Argentina’s brine fields or Chile’s Atacama operations will expect Bolivia to deliver not only geological potential but also predictability.

At minimum, foreign miners will require:

1. Stable governance and rule of law: clear enforcement of contracts, recourse to arbitration, and protection from arbitrary expropriation.
2. A modernized mining code: transparent concession rules, competitive royalties, and streamlined licensing processes.
3. Infrastructure investment: roads, rail, power, and water systems to support large-scale production in remote areas.
4. Social license: frameworks for Indigenous consultation, local employment, and benefit-sharing that prevent the protests and blockades that have plagued past projects.
5. Environmental safeguards: credible water management policies in the arid salt flats, where lithium extraction competes with fragile ecosystems.

Natural Gas: A Declining Giant

If lithium is Bolivia’s promise, natural gas has been its lifeline. For two decades, gas exports to Brazil and Argentina provided the bulk of the country’s foreign exchange. Yet today, production is in steep decline. Fields are aging, exploration has dried up, and the national company Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) is starved of capital.

The decline is the direct legacy of the 2006 re-nationalization of hydrocarbons under Evo Morales. While politically popular at the time, nationalization drove out foreign investors, reduced exploration, and left YPFB as both regulator and operator—an inefficient, politicized entity unable to sustain output. By 2025, Bolivia has slipped from being South America’s second-largest gas exporter to a marginal player struggling to meet even domestic demand.

Reviving the sector requires nothing less than structural reform. The next government will need to decide whether to re-privatize parts of the industry or at least open exploration and production to private partners under clear contracts. Investors will demand fiscal clarity, dispute-resolution mechanisms, and guarantees against sudden policy shifts. Just as importantly, YPFB must be depoliticized and modernized—transformed into either a commercially viable partner or a regulator with limited operational reach.

Local Political Resistance

One obstacle to reform lies in Bolivia’s fragmented political geography. Many provinces and municipalities where gas fields and mineral deposits are located remain under MAS control. Local leaders have historically relied on resource rents from state monopolies to fund programs and consolidate power. For them, privatization threatens not only ideology but also revenue streams.

As such, moves to reduce state ownership—whether in lithium or gas—will likely provoke resistance. Demonstrations, legal challenges, and political campaigns against ‘foreign looting’ are foreseeable. Yet the extent of opposition will depend on how reforms are structured. If the central government ensures that local jurisdictions retain a share of revenues, or that communities receive visible benefits such as infrastructure and jobs, opposition may be blunted.

The Currency Question

Behind the debate over resources looms an even more immediate crisis: Bolivia’s currency peg. The boliviano has been fixed against the U.S. dollar since 2011, a policy that once ensured stability but has become unsustainable as foreign reserves evaporated. From $14 billion in 2014, reserves have collapsed to less than $2 billion, with liquid cash balances in the tens of millions. The true accounting of reserves has remained a state secret for more than a year.

Maintaining the peg without reserves is impossible. A devaluation is almost certain, the only question being how deep and how fast. Economists warn that the boliviano could lose between 20 and 50 percent of its value in the near term, depending on whether the government secures emergency external financing. That will be a painful adjustment for consumers but will also provide timely opportunity to foreign investors.

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Conclusion

The 2025 elections have set the stage for a profound transformation in Bolivia’s economic strategy. With reserves nearly depleted and growth stagnating, the country cannot afford symbolic politics. Whether through a cautious centrist approach or a more liberalized model under right-leaning leadership, Bolivia must unlock its lithium wealth and revive its gas industry if it hopes to rebuild its currency strength after the inevitable devaluation that awaits in the first months of the next government. 

The stakes extend beyond Bolivia. As the world races toward electrification, global miners and automakers are searching for stable supplies of lithium. Brazil, Chile and Argentina are already capitalizing. Unless Bolivia can match their openness, infrastructure, and legal certainty, it risks being left behind—sitting on the world’s richest lithium fields but unable to profit from them.

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John Price

John Price is the Managing Director of Americas Market Intelligence. With 20 years of experience in Latin American market intelligence consulting, John has supervised nearly 1,200 client engagements and advises clients in more than 20 countries across Latin America. John’s areas of focus for AMI Perspectiva include Latin America’s natural resources, logistics and industrial products industries.

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