Latin America and the Caribbean is falling short of its potential in the lithium industry despite its large reserves, a new study by a United Nations agency said Thursday, warning its limited “window of opportunity” could close.
The Economic Commission for Latin America and the Caribbean (ECLAC) said that much of the region was struggling to process the mineral locally, despite its lithium rich reserves.
“Its current performance falls far short of (its) potential, as reflected in the relatively small volume of production of lithium raw materials and compounds,” the commission said.
The countries in the lithium triangle (Argentina, Bolivia and Chile) have 56% of the world’s total reserves, while the region as a whole has 60%.
The report flagged the opportunity arising from the global energy transition, including the advancement of electromobility and clean energy, and the use of lithium in electric vehicle batteries.
As a result, the price of these minerals has risen rapidly, with lithium prices surging almost nine times, the ECLAC said.
“Latin America and the Caribbean have great potential to become a key player in the global industry,” it said.
Yet demand is not being capitalized on due to production processes in areas like Mexico still being developed, as well as complications arising from the chemical characteristics of the region’s salt flats.
“While in 2021, 37% of the lithium consumed worldwide came from Latin America, this figure is expected to be around 32% by 2030,” the study said, noting the “window of opportunity” was limited to a few years amid the threat of new players and the recovery of minerals from recycled batteries.
In 2021, the world supply of lithium reached around 500,000 metric tons of lithium carbonate-equivalent and 96% of the production was concentrated in Australia, Chile, China and Argentina, per the report.
