China’s firms seek to avoid pitfalls in search of key EV metal in Latin America: analysts

Latin American countries, such as Chile, Bolivia, Mexico and Peru, are placing extra scrutiny on overseas investment in their lithium industries

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An aerial view shows the brine pools and processing areas of the SQM lithium mine on the Atacama salt flat in the Atacama desert of northern Chile. Photo: Reuters

Published: 6:00am, 11 Sep 2024Updated: 5:38pm, 16 Sep 2024

Chinese firms, which needs the raw material to make batteries for the world’s largest electric vehicle (EV) market, are hitting resistance in some Latin American countries that hold the keys to the world’s reserves of the soft, silvery-white alkali metal.

The miners face environmental, protectionist and occasionally political barriers, analysts said, with some issues leading to legal problems and prolonged negotiations.

Latin American countries, such as Chile, Bolivia, Mexico and Peru, also place extra scrutiny on non-Chinese investors, but China’s access to lithium is seen as especially critical as it is the largest producer of EVs with about US$34.1 billion worth of exports last year.

“China is currently the world’s largest lithium smelter, and the demand for lithium ore grows day by day,” said Aggie Hu, senior editor with the China commodity data analytics service Mysteel Global.

“At the same time, other countries are basically reviewing their own national industrial development needs and are gradually paying more attention to lithium resources.”