Lithium: why Latin America is key to the global energy transition

According to him United Nations Development Program (UNDP), Latin America hosts approximately 60% of the lithium identified in the world. Argentina, Bolivia and Chile are considered to be in the “lithium triangle”, an area of ​​the Andes that borders the three neighbors and is rich in lithium reserves. lithium.

The United States Geological Survey (USGS) calculates that, of a world total of 86 million tons of lithium identified, Bolivia harbors 21 million tons, Argentina 19.3 million, and Chile 9.6 million.

However, according to the Center for Strategic & International Studies, Chile leads the way in using these reserves for commercial production. According to this center, Argentina and Bolivia are lagging behind due to investment problems and more difficult geographical conditions.

UNDP says it’s also hard to make money from lithium production because most of the industry’s profits come from a long value chain that creates batteries. The top ten battery manufacturers by market share are in Asian countries. Therefore, Latin American countries will have to invest more to localize more of the value chain in order to reap significant benefits.

Until now, most of the countries with lithium resources have not been able to successfully extract it.

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Sustainability challenges around lithium extraction

Lithium extraction requires the use of very high volumes of water, about 2.2 million liters per ton of lithium. This has caused serious problems around water stress, a situation in which the water resources of a region are not sufficient to meet its needs.

The Bolivian mine of San Cristóbal consumes 50,000 liters of water per day. In Chile, lithium mining companies have been accused of depleting vital water reserves, up to 65% in the Salar de Atacama region, according to reports.

Most of the lithium production in Latin America comes from salt flats with fragile ecosystems. According to UNDP, mining operations also carry the risk of contaminating local watersheds.

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Indigenous communities also depend on the water supply for their subsistence. Argentine indigenous activist Román Guitián told Time magazine that he grew up near the country’s oldest lithium mine, in Hombre Muerto, and that his family raised llamas, goats and sheep. However, the diversion of fresh water from the Trapaich River, used in lithium production, has dried up the valley. “It was beautiful. But today there are no animals because everything is dry”, says Guitián. “In the future, we will have lithium, we will have electric cars, but we will not have water.”

According to Time, US lithium manufacturer Livent, which operates the mine, has launched a program to restore the valley through replanting and new irrigation systems. But it also plans to double the plant’s lithium production capacity by the end of 2023 and is digging a pipeline to another nearby river.

lithium fever

According to the International Energy Agency (IEA), the global energy transition is expected to multiply the demand for lithium by 40 by 2040. Lithium-ion batteries are used to store energy from renewable sources such as wind and solar.

Demand for electric vehicles skyrockets as more countries commit to ditching gasoline-powered cars. Lithium, sometimes called “white gold”, is one of the key components of electric vehicle batteries. Globally, electric vehicle sales rose to 6.6 million in 2021, nearly double the year before.

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The huge demand for the metal has caused a rise in prices that is creating incentives to mine even more lithium.

Identified lithium resources increased from 53 million tons in 2018 to 89 million tons in 2022, according to the USGS.

Recycling can reduce demand for lithium

Increasing battery recycling is another way to make the future of electric vehicles more sustainable. According to the IEA, the number of used electric vehicle batteries reaching the end of their initial useful life is expected to increase after 2030.

The report “A Vision for a Sustainable Battery Value Chain in 2030″ (A vision for a sustainable value chain of batteries in 2030) of the World Economic Forum indicates that, in the base case, it is estimated that in 2030 54 will be recycled % of batteries at the end of their useful life. According to the report, this could cover 7% of the demand for raw materials used in the production of batteries for electric vehicles that year.

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The Shaping the Future of Energy, Materials and Infrastructure Forum platform aims to enable the growth of sustainable economies to help curb climate change and create a more equitable world. . Issues related to lithium extraction will be discussed at the Forum’s annual meeting in Davos, January 16-20, 2023.

Source: World Economic Forum.