Laguna de Cotacotani is severed from the Chungara Lake by a cliff of volcanic rock and thus groundwater flows in from Chungara Lake. The main generators of water in to this lake are the El Encuentro Creek and Benedicto Morales River. The lake of Cotacotani has the salient feature of numerous islands and islets which are basically the formation of lava mounds originated from past volcanic eruption in that region. The surface area of this lake is 6 km2 and it holds a bulk of water, which measures between 30 to 40 million of m3. This water empties into the Coipasa Lake (Bolivia) through River Lauca.
The Lauca National Park is located very near to this lake. Investigations say that this Laguna De Cotacotani has been a group of 'kettle hole ponds', originating from the volcanic debris of the past volcanic events.

