Consultation draft. The text is not final and may change before it goes to the Plurinational Legislative Assembly.
Since 2014 every new mining contract in Bolivia has needed an act of parliament. Under Law No. 535, the current mining law, contracts signed since it was enacted (bar those converting older transitional permits) go to the Plurinational Legislative Assembly, which has 90 days to rule on them. The deadline has proved notional and the process political. In June 2024 the Senate threw out a bill that would have approved 19 mining contracts at a stroke. A working paper published in April by Harvard’s Growth Lab notes that no other Andean country puts big mining contracts to a parliamentary vote, and that Bolivia has not opened a large mine since San Bartolomé in 2008.
The draft Mining and Metallurgy Code goes straight at that bottleneck. Only one kind of agreement would still need a law, the public interest contract signed by the state miner, Corporación Minera de Bolivia (COMIBOL), in strategic areas. Every other contract would be approved administratively and take effect once entered in the Mining Register. It is the most far-reaching change in the text. Yet the draft speeds up the way in while barely touching the two questions that matter most to a foreign investor, what it can do with its mining rights and where it can go to court if things turn sour. Several of its most investor-friendly provisions also rest on a debatable reading of the constitution, or depend on laws that have yet to be written.
The text should be read with the caution it asks for. The Ministry of Mining and Metallurgy published it on 3 November on a newly launched microsite, codigominero.mineria.gob.bo, where anyone can read it and leave comments. It is neither a bill nor a final text. It is labelled a “document for consultation”, covers only Book One and, according to ABI, the state news agency, its structure and content “remain subject to review and adjustment”. The published version bears that out. It still carries internal editing stamps such as “REVISADO 21/10/2026”, cross-references to articles yet to be numbered and a note in which COMIBOL suggests revisiting an increase in its participation. The government expects to send it to the Assembly by the end of November.
A quicker way in
Legislative approval is not the only brake the draft tries to release. Applications stuck with AJAM, the current mining regulator, would be processed as grant contracts by a new National Mining Authority, which replaces it and also takes over oversight of the mineral trade. Ground set aside for COMIBOL in 2012 would be opened to new applicants if the company does not claim it within six months of the code taking effect. The draft also takes aim at speculators who sit on concessions. Holders must start work within a year, cannot down tools without good reason for more than six months in a row, and paying the annual fee does not count as activity.
The centrepiece, however, stands on shaky legal ground. Law No. 535 and the draft rely on the same clause, article 158 of the constitution, which gives the Assembly the power to approve “public interest contracts relating to natural resources and strategic areas”. The 2014 law read it as covering every new mining contract. The draft reads it literally, applying it only to contracts that carry that label. The narrower reading is defensible on the text, but it means an ordinary statute setting the limits of a power the constitution gives the legislature, and the last word belongs to the Plurinational Constitutional Court. Until the court rules, any contract signed without a law will carry a risk of challenge that lenders will price in.
Existing contracts are promised continuity, and rights granted under Law No. 535 are respected. There is one awkward exception. COMIBOL’s joint ventures must be converted into “mining association contracts”, a category the draft no longer provides for. Nor does Book One repeal Law No. 535, so how the two will coexist remains unclear.
A majority partner
For strategic projects on COMIBOL ground, the public interest contract replaces the association contract, and what changes is the money rather than the control. COMIBOL’s minimum share of profits falls from 55% to 51%. Control stays where it was. Since a 2016 amendment, the boards of these associations must have a COMIBOL majority and a state chair, and the draft keeps both. What is new is that the private partner, or a specialist operator, may run operations, and that COMIBOL must take legal action and stand by its partner if the site is invaded. For the partner putting up the capital and technology, that means four more points of profit and a little more support on the ground, but no bigger say in strategy. These contracts would run for up to 30 years, with a single extension that would not need the Assembly’s approval.
The mining production contract, aimed at private companies working COMIBOL ground, is simpler and also bypasses the Assembly, but it leaves open the variable that matters most. COMIBOL would take a share of gross sales “subject to permanent updating”. If that means the rate can change over the life of the contract, no financial model can treat it as fixed. The contract runs for up to 20 years, renewable after a review by COMIBOL, and when it ends buildings and improvements pass to the state company without compensation.
The locks stay on
What the draft leaves alone matters as much as what it changes. Mining areas still cannot be transferred, seized by creditors or inherited, and holders may not assign or lease them. Minerals in the ground cannot be securitised or pledged, and geological data can be used to raise money without creating any security over the deposit, much as today. Project finance will still have to rest on output, equipment and contract cash flows rather than on the mining right itself, and lenders charge for that in higher margins and extra collateral.
There is one opening, and explorers will welcome it. A licence holder could have its preferential right to a contract exercised by a third party, whereas today it can only share that right with one. The substitution covers the right alone, not the area or the minerals, but it allows the model familiar elsewhere, in which a junior finds a deposit and a major builds the mine. Other changes are less kind to explorers. Licences would shrink to 250 grid units (cuadrículas), half today’s maximum, although an alternative from the national association of medium-sized miners, written into the draft, would allow up to 800 for large projects. Each company could file two applications and would have to show work on the licences already granted before filing a third.
Nor does the draft change how conflicts are settled. Disputes under public interest contracts would be governed by Bolivian law, with domestic arbitration only for matters that can be arbitrated, while ownership of the resources, title to mining rights and the exercise of public powers are kept out of arbitration altogether. The constitution places foreign investment under Bolivian jurisdiction and rules out international arbitration in oil and gas. The government argues that outside hydrocarbons Bolivia may go before international tribunals, and the investment bill it sent to the Assembly in August seeks to reopen that route. The draft mining code does not follow suit. If both pass as written, Bolivia would have a general law that allows international arbitration and a sectoral code that provides only for domestic arbitration in its strategic contracts. For foreign investors, real protection will still come from how deals are structured and from political-risk insurance rather than from the mining law.
Incentives, details to follow
The incentives chapter is the most eye-catching. Projects worth $50m or more could get, among other things, up to 30 years of tax, royalty and contractual stability, duty-free capital goods, accelerated depreciation, corporate-tax relief and a lower royalty on extra output smelted or refined at home. Any miner could also import machinery and equipment for new projects or expansions duty-free for three years. The catch lies in the text itself, which makes the large-project regime subject to “the conditions and limits expressly established by law” and leaves stability to regulations. The code announces the incentives and leaves their substance for later. Until that law exists, no investor can count on them. General royalty rates, meanwhile, stay largely as they are.
A shorter consultation
Prior consultation of indigenous communities is the other big procedural change. The draft keeps the rule that consultation confers no veto, as the current law already does, but limits it to a single round per contract, cuts its maximum length from four months to three and, failing agreement, moves the final decision from the ministry to the new mining authority. It also excludes recent settlements of people who moved in to mine, and no longer mentions intercultural communities, as Bolivia’s settler communities are known. One article ends with a sentence in capital letters stating that there will be no prior consultation where the territory overlaps state land and private property. It reads like a drafting note and, if it survives into the final text, would have wide effect.
Short deadlines help planning. The risk lies elsewhere. Prior consultation is a right under the constitution and under Convention No. 169 of the International Labour Organization, and a consultation that a court finds wanting is one of the commonest ways a project already under way is brought to a halt. A faster consultation can make for a slower project.
The cooperative gamble
The most politically charged change concerns cooperatives. Today the law bars them from partnering with private companies, and a breach is grounds for terminating their contracts. The draft creates a productive association contract under which private firms, Bolivian or foreign, could team up with cooperatives on specific projects without the mining right being assigned or encumbered. Cooperatives have concessions, workers and political clout, but little capital, so the opportunity is large. It is also where resistance will be fiercest. The La Paz regional workers’ federation has called the draft “lapidario”, or damning, and accuses it of reviving the mining code of the 1990s, while the National Federation of Mining Cooperatives (Fencomin) complains that it was sidelined from the process.
More access, the same protection
The draft does more for access than for protection. It cuts the time and political uncertainty before a contract is signed but leaves what happens afterwards, once the capital is sunk into the mine, much as it was. For a sector that has gone almost two decades without opening a large deposit, shortening the wait is real progress. It is less likely to be enough for the companies able to finance a large mine, which look above all at whether they can pledge the project, sell it and defend it before a neutral tribunal.
The text that reaches the Assembly may look different. The editing notes, the empty cross-references and the medium-sized miners’ proposal describe a document still under negotiation, and opposition from organised labour and part of the cooperative movement points to a difficult debate. Three questions will decide how far it goes. The first is whether the narrower rule on legislative approval survives the Assembly and the Constitutional Court. The second is whether the incentives get the law that would make them enforceable. The third is whether COMIBOL’s share under production contracts is fixed or remains “subject to permanent updating”. The answers will decide whether the new code changes the decision to invest in Bolivia, or merely its timing.
