The Lithium Triangle

How Chile, Argentina and Bolivia hold much of the world's lithium, vital for electric vehicle batteries, and the different ways they manage it.

Lithium is a key ingredient in the rechargeable batteries used in phones, laptops and electric vehicles. As demand for electric vehicles has grown, lithium has become one of the world’s most important critical minerals. A large share of the world’s known lithium resources lies in an area where Chile, Argentina and Bolivia meet, often called the lithium triangle.

Where the lithium is

In the lithium triangle, lithium is found in brine beneath salt flats high in the Andes, such as Chile’s Salar de Atacama and Bolivia’s Salar de Uyuni. Brine is pumped into large evaporation ponds, where the sun concentrates the lithium over many months. Australia, which mines lithium from hard rock, is the world’s largest producer, while Chile is among the top producers.

Three approaches

The three countries have managed lithium very differently:

Chile has long allowed private companies to extract lithium under state contracts. In 2023, its government announced a national lithium strategy giving the state a controlling role in new projects through partnerships between private firms and the state copper company, Codelco.
Argentina has a more open, provincially based system, and has attracted many foreign mining companies, making it one of the fastest-growing producers.
Bolivia, with some of the world’s largest identified resources, has kept lithium under tight state control. Production has remained small, though it has signed agreements with Chinese and Russian companies.

Resource nationalism

These choices reflect debates about resource nationalism: how much control and revenue the state should take from natural resources. More state control may keep more benefits at home, but can deter investment and slow production. More openness may bring faster development, but a smaller share of the gains.

Capturing more value

Exporting raw lithium brings some revenue, but much more value is created later in making battery chemicals, cells and cars. Chile and Argentina have tried to attract companies that process lithium or make battery materials locally. Moving up the value chain could create more jobs and income, but requires investment, skills and energy.

Environmental and local concerns

Brine extraction uses large amounts of water in some of the driest places on Earth. Indigenous communities near salt flats have raised concerns about water supplies, ecosystems and whether they share in the benefits.

Thinking resources automatically bring wealth

Lithium's value depends on world prices, which rose steeply in 2021 and 2022 and then fell sharply. How governments manage contracts, revenue, local communities and the environment determines whether lithium wealth benefits their citizens.

Key takeaways

Lithium is vital for rechargeable batteries and electric vehicles.
Much of the world's lithium lies in the triangle shared by Chile, Argentina and Bolivia.
The three countries manage lithium very differently, from open markets to tight state control.
Water use, local communities and volatile prices are key concerns.