By AFP and Entorno | 2023-07-13

SANTIAGO - Latin America, home to the world's largest lithium reserves, must prioritize technology investments to sustain its market dominance in the race to harness this essential metal for the electric mobility transition, economic experts say.

According to the Economic Commission for Latin America and the Caribbean (ECLAC), the region's production of "white gold", in terms of its global share, will decrease from 37% in 2021 to 32% by 2030. This shift is attributed to the emergence of new producing countries such as the United States, Canada, and Zimbabwe, along with increased extraction volumes.

ECLAC head José Manuel Salazar-Xirinachs said the region's outlook is "promising" for new lithium mining projects.

During the presentation of the first regional report on the lithium market on July 6, Salazar-Xirinachs emphasized the need for Latin America to develop a strategic plan. This plan should focus on "maintaining or even expanding its market share" through targeted investments, technological advancements, and enhanced governance measures.

The report revealed that the three countries comprising the "lithium triangle" -- Argentina, Bolivia, and Chile -- collectively possess 56% of the world's total of "white gold." This figure increases to 60% when considering other Latin American countries such as Brazil, Mexico, and Peru.

In recent years, demand for the metal has been voracious, leading to a 400% price increase in 2022.

This sharp rise in prices is due to a number of factors, including increased industrial use and growing demand from the renewable energy sector.

Salazar-Xirinachs warned that countries with lithium reserves have a limited window of opportunity to capitalize on the mineral's growing demand. He said that taking advantage of this opportunity "means implementing a productive development political agenda."

The demand for lithium is expected to grow exponentially in the next decade, providing an opportunity for countries with lithium reserves "to increase extraction, refining, exports, and job creation," he stressed.

This could also lead to increased "tax revenues and the development of a new industry with productive chains," according to Salazar-Xirinachs.

The global lithium market is highly concentrated, with four countries accounting for 96% of production in 2021. Australia was the leading producer, followed by Chile, China, and Argentina.