China’s lithium hold won’t be undercut by Opec-style cartel as Argentina, Chile, Bolivia consider alliance
- Argentina, Chile, and Bolivia are discussing a possible agreement on the production and pricing of lithium, an essential component in electric vehicle batteries
- China accounts for less than 6 per cent of suspected global reserves, but it controls over 60 per cent of the world’s lithium refining capacity
China is not at risk of losing its dominant position in the lithium supply chain despite ongoing discussions over the creation of a cartel for the metal similar to the one that regulates the global supply of oil, analysts said, as worldwide competition ramps up for the strategic resource seen as pivotal in decarbonisation efforts.
South American media reported in October that the foreign ministries of Argentina, Chile, and Bolivia – known collectively as the so-called lithium triangle owing to their majority share of the world’s identified lithium reserves – are discussing a possible agreement on the production and pricing for the metal, which is an essential component in electric vehicle batteries.
Observers quickly drew parallels with the Organisation of the Petroleum Exporting Countries (Opec), the 13-member partnership which has an outsize role in setting global oil prices and production levels.
It’s unlikely that a lithium organisation would be effective enough to challenge that dominance China has
“It’s unlikely that a lithium organisation would be effective enough to challenge that dominance China has,” said Chloe Herrera, an analyst with Lux Research, a sustainable innovation research company.
The three countries of the lithium triangle collectively account for around 56 per cent of the world’s identified lithium reserves, according to estimates from the US Geological Survey, with Argentina and Chile responsible for around 32 per cent of global production.
Although Bolivia is believed to be home to the world’s largest lithium deposits, it has so far struggled to launch its mining industry.
