Lithium triangle in Latin America

Bartolomé de las Casas among the Indians, source:

Lithium, often called “white gold,” is one of the lightest minerals and a good conductor of electricity. It’s used in wind turbines, solar panels, and batteries being crucial for moving away from fossil fuels. 

Latin America has a geographic area known as the “lithium triangle,” a border region between Argentina, Bolivia, and Chile, which contains over 53% of the world’s known lithium reserves, according to the U.S. Geological Survey and World Population Review, out of 98 million tons of lithium discovered globally in 2023. 

The global distribution of lithium reserves showcases a significant presence in various parts of the world. Leading the list is Bolivia with 21 million tons of lithium reserves, followed closely by Argentina with 20 million tons. The United States comes next with 12 million tons, followed by Chile with 11 million tons. Other notable reserves include Australia with 7.9 million tons, China with 6.8 million tons, and Germany with 3.2 million tons. These figures underscore the strategic importance of lithium in the global landscape, especially as the demand for lithium-ion batteries and renewable energy solutions continues to grow. 

The head of the U.S. Southern Command, Laura Richardson, remarked, “There are many things this region has to offer.” Nations from all around the globe are seeking a strategy to engage with the region.

Major world powers are trying to mine contracts with for lithium. China, Russia, the U.S., and European countries are seeking agreements. According to the International Energy Agency, China invested $4.3 billion in lithium in Latin America between 2018 and 2021, almost double what the U.S., Australia, and Canada invested combined. Chile, the second-largest lithium producer, sends half of its production to China, and Beijing has partnerships with Argentina. Bolivia has contracts with Chinese and Russian companies. Chile produces 30% of the world’s lithium. The Chilean president has launched a national strategy that treats lithium as a national resource but allows private participation. The focus is on developing batteries, positioning the country as a producer rather than a mere supplier of commodities, which could drive economic growth. Argentina, lacking a robust mining industry, is seeking new international contracts to exploit lithium. Bolivia, under Evo Morales, nationalized lithium mines in 2018, and in 2023, opened its first lithium plant at Salar de Uyuni, a vast expanse in the country.

Only Chile and, in minor amount Argentina, produce lithium on a large scale due to their more robust mining industries. The price of lithium has risen significantly, from $5,000 to $7,000 dollars in the last few years. While it has decreased recently, it is expected to grow in the future. 

While there is enthusiasm in the region, there are also concerns. The mining industry can leave behind poverty, contrasting with the multi-million-dollar gains for multinational corporations. In the context of the energy transition and the expansion of electromobility, these countries face challenges despite the opportunities. Communities in these three countries are affected by mining activities. Water extraction, necessary for lithium mining, is impacted by droughts, leading to the pumping of fresh water from rivers. Locals say, “We can’t eat lithium, but we can drink water.” Extracting lithium from the salty brines beneath the surface layer of salt flats can significantly impact fresh groundwater.

The rising lithium prices, which increased nearly nine times between 2021 and 2022, bring benefits like increased exports, job creation, higher tax revenue, and the creation of upstream production chains. However, to ensure environmental and social sustainability, these nations need clear regulations and standards, proper conflict management, greater transparency, and public participation, according to a 2023 report by CEPAL.

One key issue is that many agreements and environmental impact studies are not publicly accessible, raising concerns about how Bolivia is negotiating lithium extraction.

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