Latin America Lithium Industry: Resources, Policies and Global Impact

In a world rapidly transitioning to cleaner energy solutions, understanding the nuances of lithium production, trade dynamics, and technological innovations becomes indispensable. As demand for the metal surges, Latin America, which holds a substantial share of its global resources, assumes a central role.

Lithium resources and reserves have expanded rapidly since 2008. This trend has been mainly driven by the growing demand generated by the energy transition process. In particular, the decarbonisation of the transport industry is a major pull force, as lithium is a critical input to produce the lithium-ion batteries used in electric vehicles.

Lithium is an abundant resource which is present in different types of deposits: clays, continental salt flats, rock ore, geothermal waters, and seawater. However, given the available technologies, its exploitation is only economically feasible at an industrial scale from continental salt flats and lithium-rich rocks.

Latin America accounts for a significant share of global lithium resources, which has remained stable at around 60% between 2011 and 2022. The main source of lithium resources in Latin America is found in salt flats located in the so-called “lithium triangle”, a region comprising an area of the Andes Mountain range in northern Argentina and Chile and southern Bolivia. These countries accounted for 53% of global resources and 96% of Latin American and Caribbean ones as of end-2021.

In terms of lithium reserves, however, the participation of Latin American countries is significantly lower. Only Chile and, to a lesser extent Argentina, preserve a significant position, with 36% and 10% of world reserves, respectively. This is mainly explained by the trajectory of each of the countries in the industry. In Chile, exploitation began early in the 1990s and for several years the country was the world's leading producer. In Argentina, even though production started in 1998, exploration activities only intensified over the last decade. Moreover, resources are scattered in salt flats of smaller dimension. 

Lithium-rich countries in Latin America have pursued different policy strategies in the lithium industry. These differences reflect varying views on the role of the state in the promotion of economic development. They also depend on the resources available to implement public policies and the political will to modify existing regulatory structures. Despite the diverse approaches in regulating the lithium exploration and exploitation adopted by local governments, the main challenge for all countries in the region is to harness their abundant natural resources effectively and establish a value chain capable of facilitating a shift from being only raw material exporters to becoming producers of high-value-added products.

For more in-depth information and insights on lithium mining in Latin America and the various national policies in the sector you can check EMIS Insights’ report Latin America Lithium Industry: Resources, Policies and Global Impact.