Bolivia, Argentina and Chile are making progress in the creation of a “lithium OPEC”

RIO DE JANEIRO, BRAZIL – The governments of Argentina, Bolivia, and Chile are maintaining contact with the idea of creating a lithium cartel for the South American area. This idea has been reinforced by the recent victory of the socialist Gabriel Boric in Chile, who could resume diplomatic relations with Bolivia, which are currently broken, and the support of the Chinese government.

WHITE OIL

World demand for lithium is at historical highs and will continue to rise in the coming decades. Bolivia has the largest reserves globally, with 21 million tons. It is followed by Argentina’s 14.8 million tons and Chile’s 8.3 million tons.

The importance of such a non-renewable and highly demanded resource could allow a union of these countries to regulate the international market for this mineral. China participates in many companies that exploit these deposits and is therefore supporting this position taken by the different governments.

Chile has been a model of capitalism in the last decades. A recent telephone conversation between Boric and Bolivian President Luis Arce may generate changes in the country’s foreign economic policy.

Sources from the Argentine CTI ministry confirmed that there would be a meeting in Bolivia to advance a common agenda for lithium at the end of January.

DIFFICULTIES IN CONTROLLING EXTRACTION

The most significant difficulties are related to the sovereignty of the mining exploitations. In Bolivia, the government of Luis Arce has a plan to nationalize the resource, but even with the majority in the government, it has had problems approving it.

Argentina and Chile have a more complex situation. In Argentina, the 1994 constitutional reform granted the province’s sovereignty over the resources in their territory. In Chile, nationalization is directly prohibited by the Constitution, which implies a modification in the Constituent Convention that is currently rewriting the Magna Carta.

Although they are still taking their first steps, the importance of controlling this mineral in the short term in the international market is undeniable.

Lithium is experiencing a boom that has led to it being called the “white oil,” and China is the leading bidder to secure a cheap supply of this mineral.

Demand will only continue to rise in the coming decades and will be driven by the construction of millions of batteries. Hence the interest in creating an integrating hub in South America based on lithium for the global market.