No canon explanation of the power of lava-bending has been released. It was thought only an avatar could perform this ability. We have seen that highly skilled Earth-benders can also perform this ability.
Lavabending is a technique which involves the manipulation of molten rock. The technique is typically only performed by fully realized Avatars while in the Avatar State in order to accomplish complex feats of bending. The first known user of this technique was the Fire Nation Avatar who preceded Yangchen, who used it to cause the simultaneous eruption of small four volcanoes. - ↑ Ehasz, Aaron, Ehasz, Elizabeth Welch, Hedrick, Tim, O'Bryan, John (writers) & Volpe, Giancarlo (director). (March 17, 2006). "The Avatar State". Avatar: The Last Airbender. Season 2. Episode 1. Nickelodeon.
From its rarity, it can be assumed lava-bending is not a common ability. We have only ever seen 5 people (Kyoshi, Yangchen, Ghazan, Bolin) and Avatar Roku perform it. Lava-bending appears to be an extension of the Earthbending technique. This would be the second such extension of Earthbending with Metal-bending being the first.
- Lava-bending is Earthbending with the addition of heating rock and making it able to be moved and utilized as a liquid. Molten rock is still rock and the lava-bending appears to put the rock under enough pressure to become liquid and able to controlled in a fashion similar to water-bending. The bender is not fire-bending, they are bending a more fluid earth.
Bolin lava-bending, apparently dipping his hand into molten lava to throw it at his opponent, Ghazan, with no fear of being burned.
I suggest that somehow something is pressurizing the rock because every time Ghazan (Red Lotus Lava-bender) would create a source of lava, he would gesture downward as if he were bringing a great pressure to the rock and then it would become lava and expand as it melted other rock around it. However this is only a theory supported by the visuals.
The source of the heat which melts the rock into lava, is as of yet, unknown. The ability to lava-bend may provide the energy for the phenomena in the same fashion as fire-bending provides fire from apparently nothing more than the desire of a firebender wanting to create it.
We know that firebenders can create fire from the very air itself, so it is not unreasonable to assume that lava-benders are also able to create sufficient heat to create pools of self-sustaining lava.
We have seen with sufficient capacity, a skilled lava bender can create enough self sustaining lava to destroy an entire building made of stone.
Bolin's brother Mako is an accomplished fire-bender and since there have been questions regarding heritage and bending, perhaps this is an indication that capacities in bending may have more to do with genetic heritage than previously supposed. Bolin had no capacity for metal-bending at all, so the two advanced abilities may be mutually exclusive.