China gains ground in the “lithium triangle” with Chile, Bolivia and Argentina

China has gained ground in the “triangle of lithium” that make up Chili, Bolivia and Argentinawith a wave of investments to acquire assets of this metal, key in the energy transitionwhich have guaranteed it, according to experts, a preferential position throughout the production chain.

The International Energy Agency (IEA) has documented in a recent report that between 2018 and the first half of 2021, the Asian giant invested about US$4.3 billion in acquiring this metal and, according to Arnoldus van den Hurk, geologist at the Mining Observatory Climate Remio, half in Latin America.

Those 4.3 billion are double what the United States, Australia and Canada invested together during the same period, according to the International Energy Agency (IEA).

Furthermore, it is estimated that 90% of lithium investment projects in Latin America come from China, adds the expert, and emphasizes that almost all regional production of this metal is exported to China, thus ensuring the Asian giant the control of supply and hegemony in the area.

China has taken the lead. In a context of increasing demand for lithium-ion batteries in the automotive industry, it is the largest buyer of lithium in the world and concentrates on average 60% of its processing, despite having only a 17% share in its extraction. and be the sixth country in reserves, according to the IEA.

The IEA predicts that global demand for this metal will multiply by more than 40 by 2040 and, in that context, the area known as “lithium triangle” has become the “crown jewel” by concentrating 60% of the known lithium deposits, according to the United States Geological Survey (USGS).

Crown jewel

Bolivia has the largest amount of lithium resources in the world, 21 million tons, followed by Argentina (20 million), Chile (11 million), the US (12 million) and Australia (7.9 million), according to the USGS.

Although the largest mine of “White gold” is in Bolivia, Chile is the South American country with the greatest development of the industry, which positions it as the second world producer in 2022 (39,000 tons), behind Australia (61,000).

“It is true that Latin America has the largest reserves of lithium in brine,” Arnoldus van den Hurk points out, but “They should not believe Saudi Arabia”because those reservations “they are becoming less and less significant in the global context”, although it does recognize that the region will have some “five or seven years of good business.

Furthermore, the degree of concentration of lithium in the “triangle”, of 2 or 3 parts per million (ppm), is lower than that of hard rock lithium such as that in Australia, where a lithium of “very high purity” (200 ppm). However, its extraction “it’s more simple”adds Van den Hurk.

China gains ground in Chile

An example of the predominance of Chinese companies in the extraction of Latin American lithium occurs in the Chilean company Sociedad Química y Minera (SQM), the only one along with the American Albemarle Corporation that exploits lithium in the country: 25.86% of the capital of the Chilean company. It is in the hands of the Chinese Tianqi Lithium Corp.

During his recent trip to China to participate in the New Silk Roads Forum, Chilean President Gabriel Boric announced that another Chinese company, Yongqing Technology, a subsidiary of the Tsingshan group, will invest about US$233 in the north of the country. million in the construction of a lithium cathode plant for batteries.

In this way, the only two tenders awarded this year in Chile to access the lithium produced by SQM have gone to Chinese hands, Tsingshan and BYD, who will thus be able to obtain the metal with guaranteed preferential prices until 2030 and manufacture products with added value . And China is also gaining ground with these awards in the field of refinement.

Argentina is projected as a power

Argentina is the fourth largest lithium producer in the world, with a portfolio of 49 projects, of which only three are in production: Olaroz (from the Australian company Allkem), Fénix (from the American company Livent) and Caichari Olaroz (from the Chinese company Gafeng). .

Data from the country’s Mining Secretariat show that in the first eight months of 2023, 36% more lithium has been exported than a year ago (US$ 538 million), and by 2025 it could rise to 7,000 million, according to a study of the Stock Exchange of the city of Rosario.

In Argentina, it is striking that new investments in lithium projects come from non-mining companies, such as the oil company Tecpetrol (Techint Group), which this month acquired 54% of the shares of the Canadian company Alpha Lithium, and the automobile multinational Stellantis, which In October it announced the purchase of 19.9% ​​of Argentina Litio y Energía for US$90 million.

Argentina is an example of how, since the pandemic, investments in lithium projects in the region are beginning to come from electric automotive or technology companies, because companies increasingly prefer to control their raw materials, according to Van den Hurk.

Bolivia, a treasure in the salt flat

In Bolivia, despite having the Uyuni salt flat (Potosí), the largest lithium deposit in the world (21 million tons), its exploitation industry is still incipient.

But the country is also fertile ground for China. At the beginning of 2023, the country signed an agreement with the Chinese consortium Catl Brunp & Moc (CBC) for the assembly of two direct lithium extraction (EDL) plants for US$ 1.4 billion.

In the middle of the year, two other agreements were signed with the Chinese Citic Guoan and the Russian Uranium One Group for the installation of two other EDL complexes in Uyuni and in the Pastos Grandes salt flats, to produce at least 45,000 tons of lithium per year. .