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| Lithium: Is China beating the US in the 'white gold' war? |
More than half of the world's lithium is in Argentina, Bolivia, and Chile, which has sparked interest from governments and investors to enter these markets.
Countries like China and the U.S. don't want to miss the opportunity to get the key metal to make batteries used by electric cars. It is an expanding market that more and more parties are entering.
"The major powers are fighting to get the minerals they need for the energy transition and Latin America is a key battleground," Benjamin Gaddon, director of the Wilson Centre's Latin America program, told BBC Mundo.
Chinese companies have spent years looking for places to store so-called white gold in different parts of the world, particularly in Latin America, home to some of the world's largest deposits of the metal.
According to the US Geological Survey, Bolivia leads with known reserves of 21 million tons, followed by Argentina (19.3 million) and Chile (9.6 million).
And Mexico, although it has only 1.7 million tons (ninth on the list), has become an important player in North America, not only because of its geographic proximity to the United States and Canada but also because it is a producer. The center is being built.
Modern and aggressive game
General Laura Richardson, head of the US Southern Command, warned during a presentation to the House Armed Services Committee that China is expanding its economic, diplomatic, technological, information, and military influence in Latin America and the Caribbean.
"This region is rich in resources and I am concerned that our adversaries are taking advantage of that," Richardson said. It looks like they are investing when in reality they are extracting minerals. '
Regarding the 'Lithium Triangle' in South America consisting of Argentina, Bolivia, and Chile, he said that 'China's aggression and its game on the ground with lithium are very advanced and very aggressive.'
What does China say?
As the United States and other countries work on their plans to regain some of their energy independence, China has for years been eyeing some of the most sought-after minerals in global trade, including lithium. is done
Natural Resources Minister Wang Guanghua said in an interview with the state news agency Xinhua in early January that "China's foreign dependence on some important mineral resources is very high, and once the international situation changes, it is certain that Economic security will even affect national security.
China has included 24 strategic minerals in its National Mineral Resources Plan published in 2016.
These include conventional energy resources such as oil, natural gas, shale gas, and coal, as well as metals such as iron, copper, aluminum, gold, nickel, cobalt, lithium, and rare earth.
The plan states that minerals are "key to safeguarding national economic security, national defense security, and the development of strategic emerging industries."
Explosive growth in Chinese investment
As Chinese companies move ahead with huge mining investments in South America, the Triangular countries plan to take advantage of Chinese companies' technology and capital to boost local industrial development.
In the first three months of this year alone, Chinese companies have signed impressive deals to invest in Bolivia, Argentina, and Chile.
In Bolivia, Chinese companies won contracts for lithium projects worth about US$1 billion, according to the Atlantic Council think tank.
In Argentina, Chery Automobile Co. will invest approximately US$400 million in the construction of a plant to manufacture electric vehicles.
Trade relations between Argentina and China have become increasingly close in lithium mining. At least nine investment projects have been announced in 2022 in the regions of Salta, Catamarca, and Jojoi alone.
Technological and geopolitical competition
According to Pep Zhang, associate director of the Adrian Arsht Latin America Center at the Atlantic Council think tank, "the United States is actively working to strengthen its position in the global supply chain of critical minerals and green technologies."
In this context, 'lithium is proving to be an increasingly important area in the technological and geopolitical competition between the US and China, and China is stepping on the accelerator.'
This year, according to Zhang, is shaping up to be an important year for mineral investment in the region.
Estimates show that the US$1.4 billion pledged for this year will be surpassed by investments of US$1.1 billion in 2021 and 2020.
"In January alone, we saw three Chinese companies sign a $1 billion investment deal in Bolivia," the researcher says.
The factor of 'national security
The White House has also clearly made the minerals supply chain one of its priorities for strategic reasons.
"Minor minerals provide the building blocks for many advanced technologies and are essential to our national security and economic prosperity," the Joe Biden administration said in a statement last year.
As part of the world strives to make progress in the clean energy transition, global demand for these key minerals "will skyrocket between 400 percent and 600 percent in the next few decades," the statement said. Like lithium and graphite, "Demand will increase even more, up to 4,000 percent" for minerals.
Minerals such as lithium, cobalt, and rare metals are used in many products, from computers to household appliances, and are key to making technologies such as batteries, electric vehicles, and solar panels.
"Tough war between Washington and Beijing"
"China benefits from Beijing's willingness to invest in battery production in Latin America, while the U.S. primarily wants raw materials to make green technologies for American companies," says Benjamin.
Latin American countries may find the Asian offering more attractive.
"America clearly wants to achieve this," says Benjamin. Indeed, South America is currently caught in the tug of war between Washington and Beijing.