Korean Study Highlights LATAM Lithium Strategy Differences

A new study by Korean researchers reveals that Latin American countries are taking sharply different approaches to managing their lithium industries, with strategies ranging from Chile’s hybrid model to Bolivia’s state-controlled system, as global demand and domestic politics shape the future of this critical resource. Published in The Extractive Industries and Society journal, the research analyzes the lithium policies of Chile, Argentina, Brazil, Bolivia, and Mexico amid rising global demand for the mineral.

Despite facing similar external pressures for state involvement, the countries studied have pursued distinct strategies. Chile has implemented a hybrid model that combines strong state oversight with private investment. Argentina and Brazil maintain largely decentralized, market-driven frameworks. Bolivia has chosen a highly centralized, state-dominated approach, whereas Mexico’s nationalization efforts have remained mostly rhetorical.

Seungho Lee, Assistant Professor of the Department of Spanish and Latin American Studies, Jeonbuk National University developed a two-step decision-making framework to explain these variations. Lee emphasized that while global commodity cycles and strategic competition create external incentives for government action, the effect of these pressures varies depending on the development stage of each country’s lithium industry. Domestic political agreements then determine the extent and form of state intervention.

The study cautions foreign governments and multinational companies against applying uniform strategies across Latin America’s lithium sector. Instead, it recommends tailoring approaches to each country’s specific political and industrial context, as well as global market conditions.

Mexico’s Lithium Faces Hurdles

Mexico holds an estimated 1.7Mt of lithium reserves. Although this volume is modest compared to other Latin American producers, analysts believe the country could strengthen its position in the global market if it accelerates investment and development. Mexico currently has 82 identified lithium deposits across 18 states, with notable concentrations in Sonora (13), Puebla (12), and Oaxaca (9).

Despite the resource potential, progress in developing the country’s lithium industry has been limited. The 2025 Economic Package allocates MX$12.9 million to LitioMX, a 31.6% increase from 2024, reflecting the administration's prioritization of lithium. While funding has risen, experts argue that the allocation remains insufficient.

Rigoberto García, Researcher in Urban Studies and the Environment, El Colegio de la Frontera Norte, argues that the amount is far below what is required for a project intended to support national development. “For now, lithium remains more of an aspiration, an idea that has not yet materialized. The government has not taken the steps required to advance this sector effectively,” he concluded.

Esther Arzate, Professor, UNAM, stressed the importance of a strategic approach to raw materials for Mexico’s EV industry. “The government must also recognize the strategic importance of its mineral wealth. Without a coherent and sustainable policy framework, the ambition of positioning Mexico as a leader in the global energy transition will remain unfulfilled,” she said.