The United States needs to accelerate its energy transition—and quickly. The only problem? It needs vast quantities of raw materials to do so, and it will have to negotiate with other countries to acquire them in time.
Washington will likely need to turn to South America for lithium, a material needed to produce the rechargeable batteries that drive the energy transition. But the progressive governments of Argentina, Bolivia, and Chile—known as the lithium triangle because they have the world’s largest lithium reserves—resent more than a century of U.S. intervention. As global demand soars, all three governments plan to strengthen state control over the industry. They are looking for ways to process their lithium domestically and partner with companies from nations other than the United States—especially China, the international leader in lithium operations.
If the Biden administration truly wants to diversify its global supply chains to electrify the U.S. car market, it must abandon the archaic, punitive policies in Latin America it inherited from previous administrations and engage constructively with the lithium triangle governments.
To date, U.S. lithium extraction companies have failed to make significant headway in the region. Albemarle’s operation in Chile is the exception, but it is facing increasing regulation under the country’s leftist government. A history of U.S. intervention and support for military dictatorships in all three lithium triangle countries and their neighbors hasn’t helped Washington’s cause.
In 1971, Uruguayan author Eduardo Galeano summarized concerns about U.S. policy on the region’s natural resources, writing that “[u]nderdevelopment in Latin America is a consequence of development elsewhere” and “Latin Americans are poor because the ground we tread is rich.” Lithium triangle governments and their supporters fear this dynamic persists today. In March, as he was proposing a sovereign regional alliance on lithium, Bolivian President Luis Arce said, “We don’t want our lithium to be in the [U.S.] Southern Command’s crosshairs, nor do we want it to be a reason for destabilizing democratically elected governments or foreign harassment.”
The first U.S. administration committed to a green energy transition is ill-prepared to engage productively with lithium triangle governments. Take Bolivia, which has the world’s largest untapped lithium resources but, at present, few economically viable reserves. Since the 2005 election of former Bolivian President Evo Morales, the United States has had a strained relationship with the country, impeding U.S. companies’ ability to negotiate lithium contracts there.
Morales, an Indigenous leftist leader, has long critiqued U.S. intervention in Bolivia. During his tenure, he did not seek out partnerships with U.S. companies to extract lithium. “We need partners, companies that respect the Bolivian rules,” Morales said on a trip to Spain in 2009, as he sought talks with lithium extraction companies. “Companies that come to invest are welcome, but not to do politics.” In 2018, his government signed a contract for lithium processing and battery production with Germany’s ACI Systems. Then, in early 2019, Bolivia signed a joint venture agreement with China’s Xinjiang TBEA Group to build processing plants.
In 2019, just as the projects with ACI Systems and TBEA were about to launch, Morales was ousted in what his party considers a U.S.-backed coup, resulting in the projects’ suspension. His ouster was fueled by election fraud claims alleged by the Organization of American States (OAS), supported by the U.S. State Department; researchers, economists, and media outlets including the New York Times later disputed those claims. Before the OAS report, domestic allegations of fraud had led to protests across the country; but the opposition used the report to accelerate unrest and violence, with support from police, the military, and the international community.
“There was a coup … because we nationalized our natural resources and started the [lithium] industrialization process,” Morales claimed. A year later, Arce—Morales’s former economy minister—was elected president, ending the repressive interim presidency of right-wing politician Jeanine Añez. Arce has since echoed Morales’s arguments about the role of lithium in Morales’s forced resignation.
The reason behind Morales’s ouster is still contested, and even progressive publications have questioned lithium’s role in it. But all three lithium triangle presidents consider Morales’s ouster, which was welcomed by the Trump administration, to be a coup. Some U.S. lawmakers, including Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez, have also called it a coup.
The democratically elected Arce government expected to receive support from the Biden administration. Instead, the administration followed its predecessor’s lead and denounced Añez’s 2021 arrest on charges of terrorism and sedition. A few months later, the administration excluded Bolivia from its Summit for Democracy, angering the country and its ally, Argentina. At the summit, Argentinian President Alberto Fernández said, with U.S. President Joe Biden watching, that Latin America had “lived through a difficult time” recently, especially “Bolivia, our dear sister republic that suffered a coup endorsed by a large part of the international community and by the OAS.”
Biden officials’ decisions regarding Latin America frequently anger all three lithium triangle governments, which prioritize regional solidarity. For instance, the three governments have condemned the continued blockade and sanctions against Cuba, as well as its exclusion, along with Nicaragua and Venezuela, from last year’s Summit of the Americas. Arce boycotted the meeting, saying “Washington’s veto shows that, despite rhetoric in favor of democracy and human rights, [U.S.] officials have no genuine will to change their hostile policy toward governments with dignity that do not subordinate themselves to [U.S.] interests.” Fernández and Chilean President Gabriel Boric also criticized Washington’s decision to exclude the countries.
The Pentagon’s tactics to secure lithium contracts in the region have further exacerbated tensions. Lithium triangle governments want to keep the U.S. armed forces out of their politics. But Gen. Laura Richardson, the head of U.S. Southern Command, recently said she had met with embassies and U.S. lithium companies to discuss investing in the region and to “box out our competitors” after claiming China and Russia have invested in the region “to undermine the United States and to undermine democracy.” In March, after Richardson told the U.S. Congress that China was “taking resources away from these countries and from their people,” Carlos Ramos, the director of Bolivia’s state lithium company, balked at her assertion. “We’re taking care of our strategic resource to avoid any possibility of foreign depredation,” he said.
Meanwhile, lithium triangle governments have increasingly emphasized sovereignty over their natural resources. The Arce administration has made state-driven lithium extraction and battery production a national priority, seeking to ensure it does not repeat the region’s history of dependency on other countries to extract, process, and export high-value resources such as silver, tin, and copper. Chile’s constitution, which is being rewritten and whose changes must be approved by a referendum, will most likely follow Bolivia’s model and create a state-owned company to establish strategic partnerships and regulate private lithium investment.
But the lithium triangle knows it can’t process its lithium alone; it needs partners to fund and build infrastructure and appropriate technology. China, which does not have such a fraught history in the region, is stepping in to fill the gap. China already dominates global lithium markets: It produces approximately three-quarters of the world’s lithium-ion batteries, while the United States produces only 8 percent. Half of the 2021 growth in the global electric vehicle market took place in China, while the United States accounted for only 10 percent.
It is no surprise, then, that after long negotiations with six international companies, Bolivia signed a contract in January to partner with Chinese consortium CATL, the largest lithium ion battery producer in the world, to build direct lithium extraction processing plants and accompanying infrastructure in Bolivia. Two U.S. companies had responded to the Arce administration’s call for proposals for lithium partnerships—including EnergyX, run by Alamo Rental Car heir Teague Egan, which has no lithium experience—but were unsuccessful.
U.S. policy toward lithium triangle countries should be based on respect for the countries’ national sovereignty and the decisions of their democratically elected governments. A good start would be for Washington to promote the active participation of all Latin American governments in regional and international fora, rather than excluding some, and to provide more opportunities to collaborate on climate change and the global energy transition. Furthermore, U.S. civilian leaders, rather than military officers, should lead diplomacy. The Biden administration should also create incentives for U.S. companies to purchase batteries produced by all three lithium triangle countries. And finally, if the U.S. companies do manage to win contracts on lithium triangle soil, they should ensure that those countries—and especially the local communities that live near lithium flats—benefit financially from lithium production.
Lithium triangle governments affirm consistently that they “want partners, not bosses.” Washington needs to move beyond ingrained, historical patterns of conflict and intervention, and forge productive partnerships with these nations based on a shared priority: the clean energy transition.
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