In step with the green transition and the increased production of electric cars, the world is hungry for the "white gold" - lithium. Latin America could become a geopolitical projection surface as economic superpowers fight over access to lithium, and this could have consequences for both the environment and people.
Lithium is one of the future's most valuable substances and the main ingredient in the manufacture of lithium-ion batteries, which are used, among other things, for electric cars and computers. The world's largest lithium reserves are found in Latin America, at the so-called lithium triangle that stretches across Argentina, Bolivia and Chile. It is a valuable area that generates approx 60 USD per tonne of the mineral.
A demanding manufacturing process
The Lithium Triangle consists of extensive salt flats. During extraction, lithium-containing brines are drilled from underground salt lakes up to the surface to evaporate. Between 12 and 18 months later, the filtration is complete and lithium can be extracted to then be used in the manufacture of lithium-ion batteries.
Mining can be both energy- and time-consuming, depending on the nature of the area. Elin Doverborg previously worked with geopolitical analysis at Consilio consulting firm, and has Latin America as her main interest.
- Large amounts of water are required to extract lithium, explains Elin Doverborg.
Around 2,2 million liters of water are needed to extract one ton of lithium – a process that affects groundwater sources in the mining area. This is something that creates concern among the indigenous groups that live nearby.
The rights of indigenous groups are neglected
Many indigenous groups along the Lithium Triangle already live in economic vulnerability and depend on the water sources for their survival. In Argentina, indigenous groups are protesting that lithium mining is destroying the land they live on and use for livestock. Their situation is further complicated by the fact that many of them have no legal ownership of the land they have lived on for centuries.
Several indigenous groups also experience that their rights, as well as control over the use of the land, are being neglected as companies establish themselves to extract lithium.
- There is potential for businesses to contribute to the economy and social sustainability, through, for example, job opportunities. But domestic political difficulties, such as socio-economic problems, social injustice and corruption complicate the situation, explains Elin Doverborg.
Latin America can become a geopolitical projection surface
Salar de Uyuni, the “salt desert”, up on the highland plateau of Bolivia – an area the size of Hawaii – make up about 50 percent of the world's lithium reserves. But the resource-rich nation lacks enough equity, infrastructure and technology to tap into its store of white gold. This makes the country dependent on foreign investors.
In January 2023, the Bolivian government signed an agreement about one billion USD with three Chinese companies that will exploit the country's lithium resources. Bolivia becomes the third country in the triangle, after Chile and Argentina, where China extracts its lithium.
- A recently published study shows that China controls approximately two-thirds of the refining processes in lithium extraction in Latin America, which is interesting from a geopolitical perspective, says Elin Doverborg.
She describes China as a dominant actor whose influence over the continent is growing ever greater. Elin Doverborg believes that Latin America risks becoming a geopolitical projection surface for the economic and strategic interests of major global players.
- You will fight for the resources. China has already bought into large parts of the infrastructure and various business areas, and is establishing free trade agreements with individual countries in Latin America, explains Elin Doverborg.
