I. Introduction
Lithium has become the “new oil” of the global energy transition—and South America’s Lithium Triangle (Argentina, Bolivia, Chile) holds more than half of the world’s known reserves—about 56% overall, with Bolivia alone containing roughly 21%, the largest share globally. Yet production remains highly uneven; Chile produced nearly 49,000 tonnes in 2024, Argentina about 18,000 tonnes, and Bolivia just a few hundred tonnes. This imbalance is no accident. Bolivia is fast-tracking state-led lithium development, including a recent $1 billion deal with Chinese investors to build two lithium plants targeting 35,000 t/year. Chile is moving toward a model of partial state control, with its new Codelco‑SQM partnership giving the government a majority stake and advancing its National Lithium Strategy. Argentina, on the other hand, is keeping its market open, welcoming private and foreign investors under favorable terms. As demand for lithium soars—fueled by the electric vehicle boom and the push for renewable energy—these contrasting approaches go beyond simple economic policy. They mark a shift in how the Lithium Triangle is positioning itself in global trade and redefining the geopolitics of the energy transition.
II. The Rise of Resource Nationalism
- Bolivia – State-Led Strategy in the Spotlight
Bolivia, with the world’s richest lithium reserves, has adopted an explicitly state-led development model. In late 2024, it signed a $1 billion agreement with a Chinese-led consortium—CBC, including CATL—to build direct lithium extraction plants in Uyuni, with the state retaining a 51% stake in each project. Beyond holding a majority stake, Bolivia limits foreign control by keeping state oversight over operations, requiring technology transfer, and restricting export rights, which ensures that key decisions stay in government hands. However, public outrage has erupted; in July 2025, a chaotic congressional session descended into shouting, water-throwing, and protests as lawmakers opposed deals with Chinese and Russian firms worth around $2 billion.
- Chile – Nationalization and State Control
Chile, the world’s second-largest lithium producer, has taken a clear step toward greater state control. Chile has also historically enforced stricter environmental standards than Bolivia, with regulators sanctioning SQM for over-extraction, reflecting a stronger oversight framework. In April 2025, President Boric unveiled a plan that would require all new lithium contracts to operate as public‑private partnerships, ensuring a significant role for the state in shaping the industry’s future. The state mining firm Codelco is now preparing a joint venture with SQM, with Rio Tinto also joining a new project in Maricunga under this model. Negotiations are underway to include indigenous Atacameño communities in governance plans—a first in Chile’s lithium sector.
- Argentina – Hybrid, Investment-Friendly Approach
Contrasting sharply with its neighbors, Argentina has embraced an investor-friendly hybrid model. In May 2025, the government approved a $2.5 billion lithium project led by Rio Tinto at Salta’s Rincon salt flat under a new investment incentive regime (RIGI). China’s Ganfeng Lithium launched a $790 million second phase at the Mariana site, which has a capacity of 20,000 t/year. The project is supported by a solar park and benefits from favorable conditions under RIGI. Additional projects by the Argentine firm Galan Litio have recently received RIGI approval (for $217 million), although Ganfeng’s Mariana had been rejected earlier for not meeting the initial investment criteria. Argentina forecasts a 75% production increase to 130,800 t of lithium carbonate equivalent in 2025, underscoring its expanding output.
III. Global Power Struggle
- China’s Strategic Dominance in Lithium and EV Supply Chains
China today dominates nearly every step of the lithium‑ion battery supply chain. It processes around 60–70% of global lithium, produces about 75% of battery cells, and controls the majority of anode and cathode output. Chinese firms like CATL and BYD command massive market shares—CATL alone holds roughly 38%, while BYD accounts for about 17%—and China’s firms also invest deeply into extraction, refining, and recycling operations in the Lithium Triangle via joint ventures and minority stakes in Argentina, Bolivia, and Chile.
- U.S. and EU Responses: Securing Supply, Challenging Dependency
In response, the U.S. has sought to reduce its reliance on foreign suppliers by framing critical minerals like lithium as matters of national security. But some analysts warn that current policies, such as those in the Inflation Reduction Act, could unintentionally deepen U.S. dependence on Chinese firms rather than break it. The European Union faces similar challenges, with its Critical Raw Materials Act criticized for lacking the enforcement and incentives needed to make a meaningful impact. Industry leaders warn that without strong incentives, European lithium producers risk staying uncompetitive and dependent on Chinese inputs.
- Regional Alliances and Multilateral Proposals: Beyond U.S.-China Rivalry
Countries in Latin America are seizing on shifting alliances. China has deepened its engagement in the region via the China–CELAC Forum, announcing $9 billion in yuan‑denominated credit lines, visa‑free travel deals, and infrastructure funds to strengthen ties with Brazil, Bolivia, and Chile. At the same time, Latin American countries are also taking steps to coordinate among themselves through forums like CELAC and MERCOSUR, signaling that they are not only reacting to external powers but also pursuing their regional agenda. At the 2025 BRICS summit in Rio, Brazil—holding the bloc’s rotating presidency—emphasized reforming global financial governance and increasing trade cooperation within the Global South. Such forums create space for Latin American voices to advocate for fairer trade, alternative finance mechanisms, and articulated strategies to break from Western dependency—especially in critical minerals like lithium.
IV. Trade and Development Implications
- Economic Opportunity vs. the Risk of “Green Extractivism”
South America’s Lithium Triangle presents an enormous opportunity: the lithium boom could drive new revenues, industrial development, and global bargaining power. Yet critics warn of “green extractivism”—extractive industries operating under a green veneer, risking environmental degradation and perpetuating dependency. In the fragile Andean wetlands, lithium extraction threatens water resources vital to local ecosystems and Indigenous communities, such as the Atacameño people in Chile’s Salar de Atacama, who depend on these water sources for their livelihoods. Yet governments often relax environmental regulations to attract investment—raising the specter of colonial-style extraction in the name of climate progress.
V. Impact on Global Supply Chains and Trade Rules
Rising lithium demand—up nearly 30% in 2024 alone—has intensified attention on supply chain resilience. Yet despite increasing demand, refining capacity outside China remains limited, and the lion’s share of processing continues within China’s control. This bottleneck reinforces asymmetric trade dynamics: countries with lithium reserves still depend heavily on Chinese downstream capabilities. Efforts to diversify—through initiatives like friend‑shoring, the EU’s Critical Raw Materials Act, or proposed Global Minerals Trusts—are undercut by high capital costs, policy uncertainty, and entrenched market power. The Lithium Triangle’s split strategies—state-led in Bolivia and Chile, market-driven in Argentina—make regional coordination unlikely due to political differences, infrastructure gaps, and competing national interests, reducing the chances of an OPEC‑style bloc.
VI. Conclusion
The Lithium Triangle is at the center of a major shift in global power. Whether it becomes a united bloc, a space for geopolitical rivalry, or a driver of regional growth will depend on the choices its governments make in the years ahead. A formal “lithium cartel” is unlikely—Bolivia’s state-led model, Chile’s semi-nationalized approach, and Argentina’s market-driven strategy are too different—but together, their weight is impossible to ignore.
As demand for batteries and other critical minerals grows, these countries have a rare chance to break from a history of raw resource exports. By investing in domestic industries and building value chains at home, they could challenge the dependency that has long shaped their place in the global economy.
If they succeed, lithium won’t just be a commodity. It could give the Global South real leverage in trade and a stronger voice in the energy transition. If they fail, however, “green extractivism” will simply repeat the same old story under a new label.
The world is watching. What happens in the Lithium Triangle will influence not just the future of electric vehicles, but the balance of power in a low‑carbon world.
Edited by Gita Kerwin
This is an article written by a Staff Writer. Catalyst is a student-led platform that fosters engagement with global issues from a learning perspective. The opinions expressed above do not necessarily reflect the views of the publication.
Lou is a U2 majoring in Political Science with minors in Anthropology and Sociology. Originally from São Paulo and the south of France, she has lived in seven countries. She joined The Catalyst as a writer in Fall 2024 and has also been involved with SSUNS, JDSP, AIESEC, Think Pink McGill, and McGill Students for UNICEF. Lou is passionate about international law, diplomacy, and youth advocacy, with a strong interest in the politics of development and social justice across the Global South.