POLITICS OF LITHIUM IN THE ‘LITHIUM TRIANGLE’ (BOLIVIA, CHILE, ARGENTINA)

Introduction

Lithium has turned into a crucial element in the global energy transition. The detrimental effects of the current carbon-based energy system on economies, societies, and ecosystems urge the international community to pursue sustainable energy solutions. There is a shift toward a new paradigm, characterized by an increased reliance on renewable energy sources. In this context, electrical energy storage systems, rechargeable batteries, and electric vehicles are becoming significant components of the new concept. The storage and flexibility capabilities of the lithium-ion battery (LIB) make it an essential component of completely renewable energy systems (Greim et al., 2020, pp. 1–2). Particularly rising powers, such as China, Singapore, Malaysia, and South Korea, alongside established actors like the United States and the European Union, attribute strategic importance to the use and importation of lithium (Zicari et al., 2019b, p. 194).

The lithium element has a wide range of applications in modern times. By evaporating a saline solution and adding sodium carbonate, lithium carbonate can be obtained. This primary product is essential for lithium-ion battery production, which is used in various applications, including electric cars, cell phones, iPods, and notebooks. Lithium hydroxide, another lithium-derived product, can absorb carbon dioxide, making it essential for air regeneration, and is used for CO2 absorption in critical environments such as submarines, aeronautics, and mining. Moreover, lithium compounds, in their organic form, are necessary for the chemical synthesis of polymers and pharmaceutical production (Ströbele-Gregor, 2015, pp. 7–8). These diverse examples regarding its usage demonstrate why lithium is considered a strategic element that many countries need for the production of various crucial products.

Nearly 70 % of the world’s lithium reserves are located in the region called the “Lithium Triangle” within the borders of Argentina, Bolivia, and Chile in South America (Romero et al., 2019, p. 5). Located on the Andes Mountain Range and containing such a high amount of this strategic element, the Lithium Triangle attracts the attention of many nations, especially rising powers. On the other hand, the countries that comprise the Triangle employ different strategies to extract the lithium element, thereby benefiting from this resource economically and socially. In the face of global interest and competition in this region, each country uses different tools and assigns different roles to public and private actors (Obaya, 2022).

The richest deposits of lithium are located in regions shaped by unique geological formations in South America. In the Andes, one of the most active volcano belts in the world, there are salt lakes (salar) within closed (endorheic) basins. The very limited amount of water in this region, which is not connected to the sea, flows towards points in the low topography. These areas, many of which are in the form of caves, are filled with thermal waters originating from volcanoes. This makes the Lithium Triangle unique, as the waters that flow through it contain high amounts of sulfur, potassium, magnesium, calcium, and lithium (Fornillo, 2019, p. 13).

Figure 1. Location of the Lithium Triangle in South America (Litio: Los Costos Ambientales Del Oro Blanco de La Transición Energética – Medio Ambiente, n.d.)

Around 60 % of the lithium element in the world is found in brine salt flats. The Lithium Triangle also covers an area with various salt flats, from which it is relatively easy to extract the lithium element. Since the most profitable lithium deposits are salt flats, they also attract the most interest for extraction to the surface (Ströbele-Gregor, 2015, p. 5). In addition to salt flats, lithium is found in environments such as pegmatites, granite, clay, and, although in very low abundance, other marine environments. (Zicari et al., 2019a, p. 54).

In this article, the policies developed by the Lithium Triangle countries —Argentina, Bolivia, and Chile —towards lithium will be examined. In the study, a critique of the political interactions facilitated by the possession of the lithium element will be presented, particularly by incorporating the views of countries in the region.

1. National Approaches and Policy Comparison

Three countries are located within the Lithium Triangle, which includes Argentina, Bolivia, and Chile. Each of these three nations employs different methods for extracting lithium and generating national income from it. Argentina chooses a model that is more open to investment; however, since it has transferred the function of developing strategies for lithium to its federal units, it cannot implement a comprehensive plan that encompasses the rest of the country. Bolivia, which has a significant part of its geography in the Andes and is landlocked, has a state-led policy of lithium nationalism due to its colonial memory and large indigenous population. Chile, on the other hand, is a country with the most extensive mining experience in the region and has successfully integrated lithium into its industry. The approaches of these countries to the lithium element will be discussed in detail under subheadings.

1.1. Argentina

The Lithium Triangle in Argentina is located in the northwest of the country. The first exploration of the salt flats here began in the early twentieth century with the work of a chemist named Luciano Catalano. He determined how abundant elements such as lithium, potassium, and borate were and attempted to justify that the state should have absolute control over lithium reserves. Catalano stated that the state should have a monopoly and control over lithium reserves in Argentina’s territory at later stages of the production chain. He demonstrated the need for a national-developmental approach to lithium and other salt flat resources, as in oil in some countries. In the 1960s and 1970s, lithium element exploration continued in the salt flats around Jujuy in the northwest region. This time, the aim was to provide low-cost input for alloys in the Aerospace and Nuclear industries (Slipak & Reveco, 2019, p. 85).

Despite the research and exploration activities undertaken by strategic state institutions in previous years and an estimated 100 million tons of nationwide lithium reserves (Romero et al., 2019, p. 28), a constitutional amendment in 1994 granted the authority to extract and control natural resources primarily to federal provinces. As a result of this situation, a multiple legislative mechanism independent of the central government would emerge regarding natural resources, including important minerals such as lithium. Hence, this reform would prevent the implementation of a single policy nationwide. The Mining Law in Argentina was enacted in the 1990s, coinciding with the period of the constitutional reform. Although the law recognized the central government’s sovereignty over minerals, its provisions prevented the state from engaging in exploration and exploitation activities (Slipak & Reveco, 2019, p. 86).[1] Argentina has also been the only country among the Lithium Triangle that does not define lithium as a strategic source in its national legislation (Obaya, 2022).[2]

The three legislative texts —the Constitution of the Nation, the Mining Code, and the Mining Investment Law —establish the foundations of the mining regime based on open-market liberalism. (Obaya, 2022). Thus, it is regulated like any other mineral without a specific national policy approach. The liberal model adopted in Argentina favors the granting of tax incentives and lax regulations. Although this seems attractive for investment, the native resources available to build technological and productive capabilities are insufficient (Obaya, 2021, p. 22). Moreover, the federal administration of the lithium element in Argentina reflects the decentralized nature of the political structure, which, in turn, creates potential tensions in the governance with respect to the exploitation of lithium.

1.2. Bolivia

Bolivia possesses one of the world’s largest reserves of lithium and potassium in the Salar de Uyuni (Augstburger, 2013, p. 42). Although the nation’s non-metallic resources in salt flats, brines, evaporations, sulfurs and other substances are classified as strategic for the country by Article 369 of the Constitution (Bolivia (Plurinational State of) 2009 Constitution – Constitute, n.d.), it has limited control over large lithium production and processing companies (Ströbele-Gregor, 2015, p. 8).

Bolivia prefers a nationalist approach towards the mining of lithium, focusing on techno-productive strategies to ensure maintaining the resource value within the country (Obaya, 2021, p. 22). However, the country’s economy remains with sufficient technological advancement and investment in research and development (Ströbele-Gregor, 2015, p. 26). On the other hand, the South American state seeks a transformation beyond the role of a mere raw material exporter. As the Bolivian economist and lithium specialist J.C. Zuleta indicates, the value chain has a multifaceted nature, including material flow, information flow, cooperation, control, and power dynamics. In this equation, some companies occupy central positions (Ströbele-Gregor, 2015, pp. 3–4).

In 2017, Bolivian Lithium Deposits YLB (Yacimientos de Litio Bolivianos) was founded with the purpose of managing the entire production chain, including exploration, exploitation, installation, start-up, operation, management, industrialization, and marketing of evaporite resources and inorganic chemical complexes (Bolivia: Ley de La Empresa Pública Nacional Estratégica de Yacimientos de Litio Bolivianos – YLB, 27 de Abril de 2017, n.d.).[3] However, the government faced technical difficulties in developing an efficient method to exploit the salt flat, resulting in significant delays in the realization of its strategic plans. Therefore, in 2018, the German firm “ACI Systems” was selected for Bolivia’s joint venture with YLB. Yet, 11 months later, President Evo Morales revoked the decree that had established the public company of YLB-ACI. This occurred in the wake of a protest movement in the Potosí area organized by a local civic committee (Obaya, 2021, pp. 24–25). Indigenous Bolivian communities’ resistance to the method by which the exploitation of the lithium mines would take place represented a challenge to the national government. More importantly, it also implied a broader conflict over the participation of a foreign company.

Since Bolivia has a history of colonialism and neo-liberalism, the state sought to manage the activities of exploration, exploitation, and commercialization of natural resources in a distinct way. Nationalism prevailed in the minds of the Bolivian government leaders. Bolivia’s initial history as an extractive primary producer and importer of manufactured products, such as tin and rubber, also applied to its neighbors, Argentina and Chile. In that equation, primary production and export were controlled by national elites associated with colonial or central powers, both historically and recently. Thus, Bolivia’s aspiration to industrialize evaporite resources constitutes a significant element of the ongoing project. This entails the extraction of lithium on a large scale as well as positioning the country as a key producer in light of capital investments (Slipak & Reveco, 2019, p. 126). However, the objective of the Bolivian strategy, which is to industrialize the production of lithium compounds, has not yet been accomplished (Obaya, 2022).

1.3. Chile

In Chile, 90 % of lithium is mined in the high-quality lithium-rich salt flats in the Atacama Desert, located in the country’s northern region. The lithium in the Atacama zone has a high concentration level, approximately 2,000 parts per million, and is relatively impurity-free. This area is unique due to a combination of factors, including high evaporation rate driven by strong solar radiation, very scarce rainfall, and aridity (Gobierno de Chile, 2023, p. 10). These features of the Atacama Desert offer excellent conditions for effective and affordable lithium mining operations.

Chile was the first country in Latin America to industrialize lithium components (Obaya, 2022).  Moreover, lithium was declared a strategic mineral under the Pinochet regime in 1979. However, the production of this element has been carried out by private companies for a long time. The most central of these companies are Albemarle and SQM. They operate through agreements with state development agencies, including the Corporación de Fomento (CORFO), the Empresa Nacional de Minería (ENAMI), and the Corporación del Cobre (CODELCO). These public companies collaborate with private enterprises through Special Lithium Operation Contracts (CEOL) (Argento & Puente, 2019, p. 187). CORFO formerly held shares in the mining sector, however, the corporation transferred them to the private sector during the neo-liberal winds of the 1990s. Two companies were established with the transition: Albemarle and SQM. This has also led to the present scenario, in which China holds 22 % of the SQM stakes (Jovine & Paz, 2025, p. 6).

While Argentina’s approach is based on a liberal framework, Bolivia has a nationalist strategy. Chile, on the other hand, in order to exploit lithium, adopts a hybrid system, in which state-led plans are combined with market forces. During the Bachelet government the National Lithium Commission was founded and conferred authority to negotiate terms of the contracts with private companies. The role of the Commission was to enhance the state’s revenue capture as well as support the integration of the resource into national industrial development (Obaya, 2021, p. 22)

In 2023, the National Lithium Strategy was announced by President Gabriel Boric (CEPAL, 2023, p. 12). The Strategy creates the National Lithium Company (NLC) to serve as a liaison between the public and private sectors, with a framework similar to that of the National Lithium Commission. The main function of the NLC is to “increase national production, attract new stakeholders and expand the industry through joint initiatives.” The Strategy also establishes the Public Technological and Research Institute of Lithium and Salt Flats. Sustainable production based on lithium is a crucial element of the plan (Gobierno de Chile, 2023). However, the Chilean government faces criticism for seeking direct control over lithium production in high-quality salt flats, which may reduce investment attractiveness (Jobet et al., 2024).

While this project contrasts with Argentina’s “business-friendly” approach and large public incentives, the Chilean government justifies this regulatory mechanism by putting forward that the strategy document aims to “generate knowledge on the quantity and quality of the reserves and environmental conditions, enable better contracts, policy design, and regulation, manage environmental and social risks, avoid enclave economies, maximize state revenue, build technical capacity, and strengthen public-private partnerships” (Gobierno de Chile, 2023). According to the United Nations Economic Commission for Latin America and the Caribbean (CEPAL), the Strategy has the potential to grant the Chilean state direct supervision of the resource exploitation and enhanced global role in lithium-ion battery value chain activities (CEPAL, 2023, p. 12).

1.4 Comparative Result

The three members of “the Lithium Triangle” exhibit divergent policies with regard to lithium’s governance. Argentina exhibits a liberal and highly decentralized model, allowing for strong investor incentives while limiting the state’s control over a strategic asset. Bolivia pursues a nationalist approach centered on developmentalist ideas; however, the country lacks technical capacity and faces social resistance. Chile’s hybrid model combines the efficiency of the private sector with the state’s regulatory control, with the 2023 National Lithium Strategy aiming for greater industrial integration of lithium.

Kıvanç SAĞIR

REFERENCES

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FOOTNOTES

[1] In the earlier decades, the General Directorate of Military Manufacturing (DGFM) had initiated the “Salares Plan” (Plan Salares) with the strategic objective of providing low-cost inputs for alloys in the aerospace and nuclear industries. Exploratory work was conducted between 1969 and 1974 in various salt flats located in Salta, Hombre Muerto, Catamarca, and Jujuy. The DGFM decided to continue exploring and exploiting the Salar de Hombre Muerto, awarding the bid to Minera del Altiplano S.A., a subsidiary of the US transnational corporation FMC Corporation. The contract, which would have given concessions to the American company, was not signed until 1991, during the presidency of Carlos Saúl Menem, who initiated the neoliberal reforms in the 1990s (Slipak & Reveco, 2019, p. 85). The case of Salar de Hombre Muerto exemplifies the transfer of control of a strategic asset to a foreign private company during the decade in question.

[2] In Argentina, the lithium was designated as a strategic element only at the provincial level. Two provinces, Jujuy and La Rioja, have designated it as a strategic resource, emphasizing its significance for energy transition and socioeconomic development (CEPAL, 2023, p. 12).

[3] The full name of Law Nº 928, which established the YLB in 2017, is “Law on the National Strategic Public Company of Bolivian Lithium Deposits – YLB.” Unlike Argentina, the Bolivian legislation recognizes lithium as a strategic element. On the other hand, despite Bolivia’s initial strategy excluding foreign participation, the law Nº 928 also paved the way for the participation of foreign companies in the exploitation process by stating: “Yacimientos de Litio Bolivianos – YLB, will develop the basic chemistry processes of its evaporite resources with one hundred percent (100 %) state participation for the production and marketing of: Lithium Chloride, Lithium Sulfate, Lithium Hydroxide and Lithium Carbonate; Potassium Chloride, Potassium Nitrate, Potassium Sulfate, derived and intermediate salts and other products of the evaporite chain. Subsequent processes of semi-industrialization, industrialization, and waste processing may be carried out through association contracts with national or foreign private companies, maintaining the majority participation of the State.”