Roughly 57% of the world's lithium deposits are found in Argentina, Bolivia and Chile. Because it's used in electric vehicle battery production, the natural resource is highly sought-after. Globally, the Chinese have invested billions to ensure their place at the front of the line. The US, too, is in a better position than its European partners.
Despite its economic dependence on the auto industry, however, Germany lags far behind. German Chancellor Olaf Scholz plans to address the issue during his trip to Argentina, Chile and Brazil this weekend.
"Compared with China, but also other countries, Germany doesn't have much of a presence in South America's lithium triangle," as Buenos Aires-based economist and consultant Carl Moses told DW. "Nevertheless, there are efforts underway to change that."
Beijing rather than Berlin
Although German companies have managed to position themselves relatively well in Argentina and Chile, they have yet to make a real breakthrough. "I'm not seeing the guiding, or at least coordinating hand that only the state can provide on this strategically important issue," says Moses, suggesting there should be a coordinated industrial and political effort. "We need German consortiums in which important players from all levels of the value chain work together."
China's advantage is most evident in Bolivia, the site of a German-Bolivian joint venture that was supposed to lead to productive cooperation. But in-company mistakes, political unrest in Bolivia, distrust from locals and the preference of socialist President Luis Arce's generally anti-European government for Beijing led to the quiet death of the project, sending Germany to the back of the line.
China's CBC consortium, meanwhile, just days ago signed a massive contract with the Andean nation — home to the world's second largest lithium deposits. Bolivian Energy Minister Franklin Molina announced that $1 billion (€920 million) would be invested into the construction of two lithium carbonate plants, making CBC the first international entity to join the project.
Better odds in Argentina and Chile
Two separate German companies each have a foot in the door in Argentina and Chile. One of them is the comparatively young Deutsche E-Metalle, which, according to its website, "intends to become one of the world leaders in the e-materials and e-mobility sector, riding the wave of the electric mobility super-cycle that has just begun." One of the keys to making that happen is indirect access to a sizable portfolio of licenses (over 70,000 hectares, or 270 square miles) in Argentina.
But China is hammering away here, too. The Chinese company Ganfeng, for instance, recently spent $962 million (€883 million) to acquire the Argentine company Lithea and its licenses to two lithium salt lakes. And Tibet Summit Resources — also from China — wants to invest €2 billion ($2.18 billion) in lithium exploration projects in Argentina.
German prospects in Chile
The situation in Chile is somewhat more difficult than in Argentina. It's hard to say what kind of regulatory framework the new constitution will provide for foreign companies, the details of which must still be politically negotiated. Last October, Liverde, a company from the eastern German state of Thuringia, signed contracts with Chilean partners in Salar de Maricunga and is ready to go.
But China is very active in Chile, too. Recently, Beijing secured a 24% stake in the Chilean company SQM, currently one of the world's largest lithium producers. That acquisition came on the heels of several other licenses for other Chinese companies.
In the medium term, Chile may still present the most realistic chances for a German breakthrough because its government's thoughts on sustainability are consistent with German approaches. Sources close to Chilean President Gabriel Boric say that his government — which is keen to maintain as much control as possible over lithium production and the value chain it creates — is open to German cooperation.
This article was originally written in German.