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The rise of Latin America’s White Oil: Opportunities & Risks in the Lithium Triangle

The rise of Latin America’s White Oil: Opportunities & Risks in the Lithium Triangle

Salt production in Salt desert The rise of lithium in catering to the world’s technological growth has been well documented, feeding our growing demand for batteries and electric vehicles. However its rise has presented Latin America and specifically those countries that make up the now famous ‘lithium triangle’ with an opportunity to diversify into an unconventional mineral with a price that continues trending upwards.

The price of lithium carbonate per tonne has seen a significant uptick over the last few years as the smartphone revolution and latest car models announced by Tesla and others continues to spike demand. Of course, a glut in supply from lithium producing countries and the number of companies operating within them will push down prices and force the smaller players out of business, but with lithium now being an irreplaceable component of our daily lives, demand is set to increase for many years.

With well over half of global reserves (figures range from 60% to 80%) found in Chile, Argentina and Bolivia – these countries that make up the lithium triangle are set to take advantage of this trend. However, despite Chile’s well established mining industry and Argentina’s return to economic orthodoxy, there are still significant barriers to entry in terms of the regulatory and social environment and in the case of Bolivia, the threat of nationalisation.

Key issues for the lithium industry 12

A recurring theme from the key issues outlined is the crucial importance of well crafted, systematic communication between private lithium companies and local stakeholders. What is required from the lithium industry is to engage in a dialogue and provide stakeholders and communities with a complete package information about the basic principles of mining and the benefits it can bring to local communities, especially in the provinces of Argentina that lack the mining culture of its nearest neighbours. This includes:

Information and insight

  • Ensuring your business receives early warning and intelligence on what’s happening on-the-ground in terms of policy, politics, media and NGO activity.

Systematic stakeholder engagement

  • Ensuring systematic dialogue with local, regional and national-level stakeholders and showing top level executive commitment to this dialogue.
  • Structuring specific dialogue around water and energy use, and structuring innovative joint solutions to mitigate community and environmental impacts.
  • Moving social programs beyond donations to focus on real impacts- crime, jobs, supply chain- then reporting benefits on a country, regional & citizen level.
  • Knowing when to engage and when not to engage. When to go directly, or work through industry associations and other third parties. What the appropriate messages and talking points are. How to follow up and systematically drive change on an FCPA compliant basis.
To discuss a potential requirement for support and learn more about our business, please contact:

James Duncan

Ian Herbison
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