Chile has one of the largest lithium reserves in the world and is ranked second as a producer of this mineral. The high demand for this resource to manufacture electric vehicle batteries has meant that the country directs specific efforts to strengthen this industry, such as the new National Lithium Strategy presented by the Government in 2023.
The new case study “Lithium Extraction and Processing in Chile and the Participation of China”, written by Johannes Rehner, ICLAC Principal Investigator and director of UC Geography, together with Antonia Lorie and Florencia Muñoz of UC Geography, addresses the complex situation of the extraction of lithium in Chile, the challenges it implies at the national level, and the role of China as a leading producer and exporter of batteries and Chile's main economic partner.
The report highlights an oligopolistic lithium market, with great influence from the Chilean State, although the extraction of the mineral is in the hands of private companies under contracts with the State that provide them with economic benefits. It also warns that the environmental impacts of this event are still unknown and could mean a significant destabilization of the salt flat ecosystems.
The study addresses the institutional framework that regulates the extraction of the mineral on Chilean soil, in addition to possible projections on the use of this resource, and concludes that the key role that batteries play in the production of cars generates constant pressure for innovation in the area and technological development, which could compromise the permanence of lithium as a strategic input.