The global race for lithium, the silver-white metal indispensable to the green energy transition, has encountered a volatile new front. In Bolivia, home to the world's largest known reserves of the mineral, violent anti-government clashes are threatening to destabilise extraction operations and disrupt supply chains. UK energy companies, which have been quietly positioning themselves for access to Bolivian lithium, are now monitoring the situation with growing alarm.
The unrest erupted last week following President Luis Arce's decision to fast-track foreign mining concessions in the Salar de Uyuni, a vast salt flat that holds an estimated 21 million tonnes of lithium. Protesters, a coalition of Indigenous communities and labour unions, argue that the deals violate sovereignty and will exploit local resources without adequate compensation. The protests have turned deadly, with at least seven killed in confrontations with security forces. Road blocks and strikes have effectively halted transport across the potash-rich region, where brine extraction operations are concentrated.
For the UK energy sector, the timing could hardly be worse. Lithium prices have trebled in the past two years, driven by soaring demand for electric vehicle batteries and grid-scale storage. British companies, including BP and Glencore, have signed memoranda of understanding with the Bolivian state mining company Comibol, though production has yet to scale. The current turmoil puts those agreements under immediate threat.
"Lithium is the new oil, and Bolivia is sitting on a geological jackpot," said Dr. Elena Vargas, a critical minerals analyst at Chatham House. "But resource nationalism and political instability create a high-risk environment. If extraction stops, even temporarily, it sends shockwaves through the entire supply chain."
Bolivia has long struggled to translate its lithium wealth into industrial production. Political infighting, bureaucratic obstacles and a lack of infrastructure have kept output negligible compared to Chile and Australia. The current crisis may now set back development by years. The Salar de Uyuni, a stark white expanse at 3,650 metres altitude, is a fragile environment. Brine extraction consumes vast amounts of water, tensions with local communities are a constant. The protests reflect a deep mistrust of the state's ability to manage these resources equitably.
The UK's exposure is part of a broader strategic vulnerability. The government's 2023 Critical Minerals Strategy identified lithium as a priority, aiming to secure supply chains for the net zero transition. Domestic production is negligible; nearly all lithium is imported from Chile, Argentina and Australia. A major disruption in Bolivia could tighten an already stretched global market.
While the immediate physical supply of lithium is not directly cut off, the market is pricing in the risk. Spot prices for lithium carbonate have risen 8% this week, and shares in British companies with Bolivian ties have dipped. Longer-term, the uncertainty may accelerate UK investment in alternative sources, including deep sea mining and recycling technologies. But those remain nascent.
The British Embassy in La Paz has issued advisories, and diplomatic channels are working to de-escalate. The UK's energy secretary, Claire Delacroix, described the situation as "troubling" but stopped short of intervention. Privately, officials concede that the affair underscores the fragility of relying on a handful of nations for energy transition minerals.
As the protests continue, the Bolivian government has offered to renegotiate the terms of the concessions. But trust is in short supply. For the UK's net zero ambitions, the lesson is sobering: the green transition runs on more than good intentions. It runs on lithium, and that lithium sits under increasingly unstable ground.
