China expands its lithium dominance in Latin America at the expense of water-strained ecosystems

China has been unrivaled in the lithium market since it adopted a national policy of promoting the energy transition to reduce its dependence on imported fuels and guarantee its energy security. The so-called “white gold” is essential for the lucrative electric vehicle industry, dominated by the Asian giant, as it is used in battery manufacturing. Between 2021 and 2023, demand for lithium increased by 250%, according to data from the International Energy Agency. More than half of the world’s lithium reserves are concentrated in the so-called “lithium triangle,” between Argentina, Bolivia, and Chile, which explains why China has set its sights on Latin America, with at least 28 projects linked to the lithium supply chain in five countries, including Mexico and Brazil.

The opportunity brings foreign investment and access to emerging technologies, but the semi-arid salt flats that typically hold the reserves have seen their fragile ecosystems threatened by the high demand for water for extraction. Several of the strategic areas are also inhabited by Indigenous communities who, in recent years, have been demanding to be included in the prior consultation process, as ratified by international agreements, and denounce the reduction of their own access to water, which depends on underground sources. These are the conclusions of the recently presented report, “China’s Presence in the Lithium Sector in Latin America and the Caribbean,” prepared by a group of institutions from various countries, grouped under the Working Group on Chinese Financing and Investment, Human Rights, and the Environment (CICDHA).

The document details how China has incorporated Latin America as a source of raw materials for the development of its alternative energy technologies, such as the manufacture of electric vehicles, photovoltaic panels, and wind power. The report focuses on lithium, but this dependency extends to all critical minerals, as Luis Cuenca, the Chilean director of the Latin American Observatory of Environmental Conflicts (OLCA) and one of the report’s authors, explained to EL PAÍS: “As a region, in the global economy’s value chain, we continue to occupy the position of suppliers of raw materials that today end up primarily in China. Chile is the second largest producer of lithium, and more than 70% of what is extracted goes to China.” A similar situation exists with copper.

The strengthening of trade relations between Latin America and China this century has been accompanied by extractivism. The value of the region’s exports to the Asian country grew more than 46 times between 2005 and 2024; nearly 80% of these exports are raw materials, the report notes. While Latin American governments have felt the political influence of Donald Trump in recent years, their dependence on China is so entrenched that the economic landscape has barely changed, as highlighted by Óscar Campanini, another of the authors and a member of the Center for Documentation and Information of Bolivia (CEDIB).

“[Argentina president Javier] Milei started out with crude statements about China, but now declares it a major trading partner. China has a central role in the region, not necessarily in terms of investment or raw material projects, but certainly in the market. Another important point is imports: we import all kinds of goods, from clothing to technology,” Campanini asserted. “Trump wants to break that dependence, but that implies rebuilding an industry that they themselves displaced to Asia.”

Along with its national strategy to secure a dominant position in the lithium value chain and its tax and credit incentives for manufacturers, China has also developed international action plans that promote principles of “green, clean, and people-centered” cooperation. The research, however, observes contradictions between rhetoric and action in some cases. In Bolivia, Chile, and Argentina, lithium extraction from brines in Andean salt flats consumes large volumes of water, exacerbating water scarcity. This is the case in the Eduardo Abaroa reserve in Bolivia and the Atacama salt flat in Chile. In the former, evaporation rates far exceed annual rainfall, while the latter is sinking by one to two centimeters per year due to the sustained pumping of brines, the text notes.

Meanwhile, in Brazil, where lithium is found in rock deposits, pressure on water resources has been concentrated in the Jequitinhonha Valley, an area already affected by water shortages. Water previously supplied by tanker trucks to Indigenous communities has now been diverted to mining operations. For its part, Mexico is undertaking its lithium project through clay extraction in the Sonora Desert, an arid ecosystem dependent on underground aquifers.

Cuenca asserts that Chile’s 50-year experience with lithium mining has deepened inequality and increased sacrifice zones. “While there is some revenue capture from the sale of raw materials, not all of it reaches the State. It is a very labor-intensive activity for the territories, but it generates little employment. The assessment cannot be solely economic; we must incorporate other environmental and social dimensions.” The rich mining region of Antofagasta, the country’s lithium and copper production hub, has the highest cancer mortality rate in Chile, according to official data. The presence of arsenic in the air and contaminated soil plays a significant role.

In the Salar del Hombre Muerto salt flat in Catamarca, Argentina, local communities have denounced the loss of water flow in wetlands, attributed to the intensive pumping of water for lithium mining operations. The Supreme Court of Justice of Catamarca decided in 2024 to suspend extractive activities, but last April lifted the restrictions after the participating companies submitted an environmental impact study.

The CICDHA report presents this comprehensive overview, concluding with a question: can the current lithium extraction model sustain a just energy transition, or will it simply perpetuate the same extractive practices that have historically generated inequality and environmental degradation in the region by replacing one extractive model with another of the same characteristics?

Sign up for our weekly newsletter to get more English-language news coverage from EL PAÍS USA Edition