Bolivia

Bolivia is a civil law jurisdiction and a contracting state to the New York Convention, recognizing and enforcing foreign arbitral awards under international standards.

The country has a centuries-long mining tradition, anchored historically in the Cerro Rico silver deposit in Potosí (discovered in 1545 and still in production). Bolivia’s mineral endowment spans base metals (tin, zinc, copper, lead), precious metals (gold, silver), industrial minerals (tungsten, antimony, boron, potassium), bulk minerals (iron ore at Mutún) and critical/strategic minerals (lithium, nickel, chromium, manganese, tantalum). Bolivia holds an estimated 23 million tons of verified lithium resources, among the largest reserves worldwide.

The legal framework is grounded in the Political Constitution of the State, which establishes the state’s original, inalienable ownership of all mineral resources. Private participation is permitted only through administrative mining contracts, not concessions. The principal regulation is the Mining and Metallurgy Law (Law No. 535 of 2014), complemented by Law No. 845 of 2016 (mining production contracts), Supreme Decree No. 24782 of 1997 (environmental regulations) and Criminal Code provisions against illegal mining.

The state acts both as grantor-regulator (through the Mining Administrative Jurisdictional Authority (Autoridad Jurisdiccional Administrativa Minera, or AJAM), the Ministry of Mining and Metallurgy, and the Bolivian Geological Mining Service (SERGEOMIN)) and as owner-operator, through the state-owned companies Corporación Minera de Bolivia (COMIBOL) and Yacimientos de Litio Bolivianos (YLB). A new mining law is currently under discussion, expected to simplify permitting and improve legal certainty.

Under Article 348 of the Bolivian Constitution, mineral resources are strategic national assets. The state holds permanent, inalienable and imprescriptible ownership of all mineral deposits, regardless of location.

Mining rights do not confer ownership of the underlying minerals. They are granted as administrative licenses and contracts, entitling holders to explore and exploit within a defined area, subject to legal and contractual compliance. Under Article 93 of the Mining and Metallurgy Law, mining rights cannot be leased, sold, assigned or encumbered directly, even though shares in companies holding mining rights may be transferred, resulting in an indirect transfer of the underlying contract.

Mining tenure is legally separate from surface land ownership. Mining rights are granted over standardized grid units (cuadrículas) (non-divisible three-dimensional volumes extending from the surface to the center of the earth).

Obtaining mining rights does not automatically grant surface access. Under Article 109 of Law No. 535 of 2014 (“Mining Law”), titleholders may request surface rights within or near their contract area, subject to:

• agreement with surface owners;
• payment of compensation; and
• compliance with authorization procedures.

Where no agreement is reached, statutory procedures under Article 108 apply to secure access. Titleholders must also engage with lawful occupants and Indigenous communities and may need to complete prior consultation where constitutionally protected rights are affected. Statutory mining easements are available to facilitate access.

Mining rights are granted nationally by AJAM, with no provincial overlap. Two main exploration instruments exist:

• Prospecting and exploration licenses, up to 500 grid units (12,500 ha); for a five-year term, renewable once for three years.
• Aerial prospecting licenses, up to 8,000 grid units; for a six-year term, extendable by up to six months.

Both confer a preferential right to negotiate an administrative mining contract for exploitation. The application process starts with a free-area certificate, followed by submission of corporate, tax and technical documentation, SERGEOMIN’s technical review and, where relevant, prior consultation. The process typically takes around 12 months.

Exploitation rights are granted through administrative mining contracts (Article 139), for a maximum term of 30 years, extendable subject to compliance. The contract process (Ministerial Resolution No. 23/2015) includes the request for a free-area certificate, technical evaluation, prior consultation (if applicable), an administrative resolution, approval by the Legislative Assembly, and notarization/registration — typically around two years overall.

Holders must pay the annual mining tax (patente minera, calculated per hectare), submit and implement work and investment programs, and submit periodic reports in concordance with the Mining Law. Non-compliance (e.g., non-payment, suspension of operations beyond statutory limits, failure to report) can trigger revocation by AJAM, which may be appealed administratively and judicially. As explained in Section 1.2 above, mining rights cannot be directly transferred; however, share transfers in the holding company are permitted (Article 136), which results in an indirect transfer.

Bolivia has no regulated system for classifying mineral resources and reserves, nor a national reporting code. The Mining Law regulates mining rights and operations but does not set technical standards for resource/reserve disclosures.

In practice, companies rely on internationally recognized codes (mainly the NI 43-101 (Canadian-listed issuers) and the JORC Code (Australian or dual-listed companies)) with estimates certified by independent qualified professionals for financing, securities disclosure and technical reporting purposes.

SERGEOMIN conducts geological studies and resource assessments for governmental purposes, but these do not substitute for the internationally recognized resource/reserve statements required by investors, lenders or foreign securities regulators.

The environmental regime rests on Law No. 1333 of 1992 (“Environmental Law”), the Mining Law, and Supreme Decree No. 24782 of 1997 (“Environmental Regulations for Mining Activities”).

All mining activities require an environmental license before starting. The permitting burden depends on the activity being conducted by each company, divided as follows:

• Prospecting/exploration: simplified regime, generally exempt from a full Environmental Baseline Study and Environmental Impact Assessment (EIA); a technical description of activities and impacts usually suffices to obtain this certificate.
• Exploitation/processing: full Environmental Baseline Study and EIA required, issued by the Ministry of Environment and Water together with the Ministry of Mining and Metallurgy. The EIA must cover environmental, archaeological, socio-economic, hydrological, air and soil impacts, and include a mine closure plan.

Bolivia has no uniform mandatory rehabilitation bond regime, but remediation and monitoring commitments are embedded in the approved environmental management plan. Additional permits may be needed for hazardous substances, explosives (Ministry of Defense) and controlled substances. Mining in protected areas is only permitted exceptionally (Article 220) and is, in practice, highly restricted.

Non-compliance can trigger administrative penalties (fines, suspension), civil liability, and criminal sanctions, including imprisonment of the company’s legal representative for unauthorized exploitation or aggravated environmental damage.

Free, prior and informed consent (FPIC) of affected Indigenous communities is constitutionally mandated. Article 352 of the Constitution requires public consultation, conducted in good faith by the state, before exploitation of natural resources in Indigenous territories; Article 207 of the Mining Law applies this requirement specifically to mining exploitation. Bolivia has incorporated the ILO Convention 169 and the UN Declaration on the Rights of Indigenous Peoples into domestic law.

Even though the state formally leads the consultation, in practice, operators drive community engagement to secure a “social license to operate”. It is customary (and often effectively required) for companies to enter into community development agreements covering infrastructure, employment and environmental mitigation, before exploitation begins. Evidence of such agreements is typically expected by AJAM and environmental authorities before granting licenses.

Consultation is not formally mandatory at the early exploration stage, but early engagement is advisable to mitigate social conflict and support later permitting. Certain Indigenous communities also hold recognized self-governance structures (Autonomía Indígena Originaria Campesina, under Law No. 031 of 2010), enabling them to impose additional conditions on projects within their territories.

Bolivia does not yet have a dedicated, binding ESG framework for the mining sector. ESG-related obligations currently arise indirectly, through community development agreements, environmental licensing, EIA requirements and mine closure/rehabilitation plans. In practice, any ESG reporting, beyond local legal requirements, is generally driven by the standards imposed by international lenders, investors or the foreign stock exchanges in which mining companies are listed.

There are emerging legislative and policy discussions aimed at aligning Bolivia’s environmental and mining regulation with international ESG and climate standards, however, no specific binding ESG disclosure regime has been enacted to date.

The Bolivian Criminal Code penalizes illegal mining and the illicit commercialization of mineral resources. Beyond this, illegal mining (particularly informal and unauthorized gold mining) remains a significant issue, especially in the La Paz, Beni and Pando departments.

Its main impacts include:

• environmental deterioration of rivers and forest area;
• mercury contamination associated with alluvial gold extraction;
• encroachment on protected areas and Indigenous territories; and
• loss of state revenue and reduced regulatory oversight.

Authorities have responded through:

• administrative enforcement actions by AJAM against unauthorized mining activities;
• environmental inspections and sanctions by the competent environmental authorities;
• judicial actions and court orders suspending unlawful operations in specific areas; and
• interinstitutional initiatives to strengthen transparency and oversight.

Despite these measures, enforcement remains challenging due to the remote location of many operations and limited institutional resources for monitoring and control.

Bolivia has no binding climate risk disclosure regime for the mining value chain, nor a dedicated decarbonization mandate or carbon tax. Climate-related considerations arise indirectly through the EIA process (e.g., water availability, ecosystem resilience) and through mandatory mine closure and rehabilitation plans, which support (without formally being labelled as such) sustainability and decarbonization objectives.

Emerging legislative and policy discussions aim to align Bolivia’s environmental and mining framework with international ESG and climate standards, potentially introducing more explicit emissions-related obligations in future. No such measures have yet been enacted.

Bolivia has a clear, if evolving, strategic minerals policy, concentrated on lithium.

Lithium and evaporite resources

Lithium and potassium are excluded from the general mining regime and reserved to the state under the constitution. Upstream extraction is led by YLB (created under Law No. 928 of 2017), preserving sovereign control. Foreign investors participate through association agreements with YLB, mainly in downstream/industrialization stages (processing, value-added production, technology), typically with YLB retaining majority participation.

Bolivia has run international tenders for Direct Lithium Extraction (DLE) projects in the Salar de Uyuni and Salar de Coipasa, engaging operators such as CATL and CMOC and Uranium One Group. A reformed lithium law is under discussion with the objective of enhancing legal certainty and standardization.

Rare earth elements and other critical minerals

Direct private exploitation of rare earths remains limited, but public institutions (COMIBOL, SERGEOMIN, the Agencia Boliviana de Energía Nuclear) are advancing exploration and capacity-building. The government has created specialized bodies focused on rare earths and is preparing new sector legislation, while promoting investment opportunities internationally, including at the Prospectors & Developers Association of Canada (PDAC) convention.

Mining operators are subject to standard corporate taxes: VAT (13%, recoverable), the Transactions Tax (3% on gross transactions), and Corporate Income Tax (IUE, 25% on net profits). Remittances abroad attract a 12.5% withholding tax (IUE-BE), applied as a final tax.

Mining royalties (Regalía Minera) are the principal sector-specific government take and are calculated on gross sales value, based on international reference prices and fine metal content, generally ranging between 1% and 7% depending on the mineral and applicable price formula. Article 224 of the Mining Law allows a royalty reduction of up to 40% where minerals are processed into refined metal products before sale.

Mining rights holders also pay an annual mining tax (patente minera) calculated per hectare, which (together with the obligation to maintain active operations) forms part of the “economic and social function” requirement for keeping rights valid.

Mining operators face a uniform fiscal framework: domestic and foreign investors are treated equally for Corporate Income Tax, the IUE-BE surtax and mining royalties. Bolivia does not grant tax stabilization agreements; the state’s sovereign authority to alter fiscal and royalty regimes cannot be restricted or frozen by contract.

Under Law No. 1391 of 2021 and Supreme Decree No. 4579 of 2021, imports of capital goods, industrial plants and heavy machinery for mining benefit from a 0% VAT rate; domestic sales of such imported machinery may also qualify for zero-rated VAT.

The Financing Fund for Mining (Fondo de Financiamiento para la Minería (FOFIM)), a state-backed fund, provides credit for equipment, concentration plants and infrastructure upgrades, traditionally focused on mining cooperatives but increasingly supporting the sector more broadly. The royalty reduction for refined products also operates as a fiscal incentive for domestic value addition.

Mining rights are granted through administrative mining contracts and cannot be freely transferred as private property. Acquisitions are therefore commonly structured as share transfers rather than direct transfers of mining rights.

Share transfers

• Capital gains realized by a Bolivian resident seller are generally subject to Corporate Income Tax (IUE) at 25%.
• Gains realized by a non-resident seller are generally subject to withholding tax under Bolivian-source income rules.
• No transfer tax or stamp duty applies to share transfers.

Asset transfers

• Gains on the sale of mining-related assets (equipment, machinery, buildings, infrastructure) are generally subject to IUE at 25%.
• Sales of movable assets may be taxed with VAT (13%) and the Transactions Tax (3%), depending on the transaction.
• Real estate transfers are generally subject to municipal transfer taxes; no stamp duty applies.

Tax treatment should be assessed case by case, particularly for indirect transfers of mining interests or cross-border sellers.

The current administration has signaled a shift towards a more investment-friendly approach for strategic sectors, including mining and lithium, while preserving constitutional state ownership. Key features include:

• targeted fiscal incentives (see Section 4.2, above);
• state-backed financing through the FOFIM;
• active international promotion, including participation in PDAC; and
• a pending new mining law, expected to simplify permitting, improve legal certainty and enable more flexible partnership structures, including increased private participation alongside state entities and cooperatives.

Foreign individuals and companies may generally invest in, own and operate mining projects, without a local partnering requirement. Key restrictions include:

• Border areas. Foreign investors cannot directly or indirectly acquire property or mining rights within 50 km of international borders; this applies to both majority and minority interests.
• Mining cooperatives. Under Article 151 of the Mining Law, cooperatives cannot enter joint ventures or association agreements with private companies (domestic or foreign). A December 2025 agreement with FENCOMIN proposes to relax this restriction, but the amendment is not yet enacted.
• Reserva fiscal minera. The state can reserve specific areas for exclusive state mining activity, with state entities holding preferential rights there.
• Strategic salt flats. Certain salt flats — for example, Salar de Uyuni, Salar de Coipasa — are reserved for exclusive state control.
• Radioactive minerals and rare earths. Exploitation is currently restricted, pending a dedicated regulatory framework.

Outside these carve-outs, both equity and asset transactions are generally available to foreign investors, subject to standard approvals.

Bolivia withdrew from the ICSID Convention in 2007 and terminated most of its Bilateral Investment Treaties (BITs) between 2011 and 2013. Foreign investors therefore generally cannot rely on the treaty-based protections historically available under those agreements, subject to any rights surviving under applicable sunset clauses.

Foreign investment in mining is primarily governed by the Constitution, the Mining Law, the Investment Promotion Law (Law No. 516) and the Conciliation and Arbitration Law (Law No. 708).

Mining activities are subject to Bolivian law and jurisdiction; investment disputes are generally resolved before Bolivian courts or, where permitted and agreed by the parties, through arbitration. For contracts involving public entities, Law No. 708 sets specific requirements for the seat of arbitration and applicable procedure.

Private financing is sourced mainly from foreign investors and international capital markets; domestic options remain limited. For the time being, the following sources of finance are available:

• Bolsa Boliviana de Valores (BBV). A largely fixed-income market, rarely used to raise equity for exploration or development. Established companies occasionally access short-term debt or corporate bonds.
• Domestic bank lending. This covers working capital, trade finance and equipment financing. Long-term project finance is uncommon, partly because mining rights cannot be used as conventional collateral.
• International capital markets. This is the principal source of project finance, mainly via foreign listings on the Toronto Stock Exchange (TSX/TSX-V) and the Australian Securities Exchange (ASX).
• Streaming and royalty financing. Not specifically regulated in Bolivia but, where used, it is typically structured under foreign law at the parent-company level rather than through security registered over Bolivian mining rights.

In practice, exploration and development are predominantly financed through foreign equity, shareholder funding and capital raised in overseas markets.

Mining rights themselves cannot be used as collateral. Article 98 of the Mining Law provides that mineral resources in situ remain collective state property and may not be pledged, securitized or registered as private property, a restriction that applies equally to domestic and foreign investors. In addition, under Article 136, mining administrative contracts cannot be assigned or transferred directly.

Holders, nonetheless, retain full ownership and disposal rights over investments, extracted production, equipment and infrastructure (Article 95), which can be encumbered and used as security in financing structures, even though the underlying mining right itself cannot.

Mining cadastral, geological and production data is collected and published by the following agencies under the Ministry of Mining and Metallurgy:

• AJAM: maintains the mining cadaster and registry of administrative mining contracts, mining rights and title status. Confirming whether an area is available generally requires a Free Mining Area Certificate (Certificado de Área Minera Libre).
• SERGEOMIN: publishes geological maps, mineral occurrence data and technical studies via its geological databases and Spatial Data Infrastructure (IDE) platform.
• SENARECOM: publishes production, commercialization, export and royalty statistics at national and departmental level.

In practice, AJAM is the primary source for cadastral and title information, SERGEOMIN for geological data, and SENARECOM for production and market statistics.

The principal vehicle is the administrative mining contract between the state (via AJAM) and the operator, covering exploration and/or exploitation (Article 139), for up to 30 years.

For larger or strategic projects, “state association contracts” allow private or cooperative parties to partner with state entities (Articles 145 et seq.), typically via public tender or direct negotiation, with state entities required to retain a minimum 55% share of project profits.

Other available structures include production contracts with COMIBOL, and private contracts between mining operators (authorized and registered with AJAM, but not representing a transfer of mining rights). Mining cooperatives are a distinct and important category of operator, even though, currently, they are restricted from partnering with private investors, subject to the pending FENCOMIN reform (see Section 5.2, above).