China Stakes Its Claim in Latin American Energy:

In 2018, China’s Tianqi Lithium committed $4.1 billion to purchase a 24% stake in SQM, a Chilean producer of lithium and derivatives that holds an important share of the world’s lithium reserves 18 Given the size of the lithium deposits, a Chilean economic development agency challenged the sale in court on antitrust grounds, but the court approved the transaction and the project is moving forward. A few Japanese companies also have been buying stakes in lithium projects in Chile and Argentina, but Tianqi’s strategic investment promises to secure its ascendancy in the global lithium market.

Despite political and economic uncertainties in Argentina, Chinese mining companies are investing in promising lithium and solar projects there. 19 One example is China’s Ganfeng Lithium, which increased its stake to 51% in a lithium production operation in Argentina’s northwestern Jujuy Province in 2020. CHEXIM also financed 85% of the Cauchari solar project in Jujuy costing nearly $400 million, at 3% per annum over 15 years, according to Reuters. The province was obliged to buy almost 80% of the solar plant’s equipment from Chinese suppliers, like Huawei Technologies. 20 In 2019, a Chinese consortium won a bid to acquire a 49% stake in a $2.4 billion project to produce lithium in partnership with Bolivian-owned Yacimientos de Litio Bolivianos (YLB). 21 However, a combination of social unrest, political uncertainty and the COVID-19 pandemic could jeopardize the project, or at minimum, cause delays. Another lithium project, between YLB and the German company ACI Systems, was cancelled before President Evo Morales left the country in November 2019. 22 Protesters demanded a battery factory and jobs from the proposed investments.

Click to see enlarged infographic. Stretching across Argentina, Bolivia, and Chile, Latin America's Southern Cone region hosts the world's largest lithium reserves.

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