Lithium, also known as “white gold,” is the only mineral that has multiplied its value several times in recent years, currently costing 450% more than in 2020. Without lithium, the much-anticipated energy transition to put a brake on global temperature rise would not be possible, and neither would electric cars nor smartphones as we know them. Like oil deposits, which are mainly concentrated in the Middle East and Siberia, most of the natural lithium deposits are found in limited areas of the planet. The main one is the so-called “lithium triangle,” spanning Chile, Bolivia, and Argentina, where unexpected wealth has been discovered in high-mountain deserts, rich in lithium.
Together, the three South American countries own around 59% of the world’s known lithium reserves. Currently, Chile competes with Australia as the world’s leading producer, followed by China in third place, and Argentina in a distant fourth place. Bolivia, which would be the world’s leading country in reserves according to some rankings, produces practically nothing, and Argentina extracts lithium well below its potential.
In South America, Chile is the only country that fully exploits this mineral, but it does so only through two private companies: the US-based Albemarle and the SQM owned by Chilean billionaire Julio Ponce Lerou, son-in-law of General Augusto Pinochet. In 2022, these companies paid the Chilean state $5.8 billion in rights and taxes, equivalent to 1.7% of the country’s GDP, twice what copper, a metal of which Chile is the world’s largest producer, leaves in public coffers.
Against this backdrop, Chilean President Gabriel Boric recently proposed the “nationalization of lithium.” While inspired by Salvador Allende’s nationalization of copper in 1971, the proposal does not involve expropriating those who have already obtained concessions. Rather, Boric aims to create a mixed public-private enterprise to start exploiting new lithium deposits but with two conditions. The first is to declare a 30% reserve of biodiversity in the Atacama Desert, from where almost all of Chile’s lithium comes; the second is to change the extraction method. Currently used in South America, the “brine” method involves a great waste of water, which is left to evaporate in areas where water reserves are scarce. According to the government’s plans, the water used should instead be reinjected into the groundwater.
The Chilean state is not the only one interested in expanding the lithium market. Chinese, US, and Russian companies are highly active in the South American triangle. In Argentina, the Tsingshan Group has just invested $800 million in the province of Salta, and in the same area, Tibet Summit Resources has announced the purchase of two deposits for $2 billion. In Bolivia, the Chinese and Russians are proposing partnerships to the La Paz government, which nationalized lithium a few years ago but still cannot extract much. For now, Chile’s project is For now, the project advanced by Chile is still the most interesting. And Latin America as a whole, despite many contradictions, is managing to position itself as a partner and, above all, to create a legal framework that protects national interests – an operation that Africa has not yet been able to achieve. For the countries of the lithium triangle, the opportunities that are opening up are certainly enormous, although still difficult to quantify. Impenetrable areas of the Andes, which have never interested anyone, suddenly find themselves at the center of the commercial war for the possession of key raw materials for globalization, which, however virtual it may be perceived, is still based on land and mines
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