MethodologyContact usSupportLogin
The event on Wednesday March 11 was co-hosted by Fastmarkets and green energy organization, Net-Zero Circle. Here, senior price reporter Leticia Simionato and senior analyst Robert Searle highlight the key insights offered.
South America is known for low-cost lithium production, but each country, and even each participating company, has specific characteristics that shape the opportunities and challenges it faces.
In Brazil, lithium is produced by hard rock mining. According to Fastmarkets’ research team, currently there are three operational plants, owned by Sigma Lithium, CBL and AMG, and another 29 projects at different stages.
In the so-called Lithium Triangle and its brine production, which controls more than 50% of global lithium resources, Argentina currently has 83 lithium projects at different stages of exploration and construction, with nine operations working. Chile currently has 23 projects at different stages, with two operations working. Bolívia has little production, with only one company producing.
South America’s share in global supply is forecast to stay at 28% between 2026 and 2035, supported by high-quality assets in the Lithium Triangle, despite brine projects having longer construction and ramp-up periods compared with hard rock equivalents, according to Fastmarkets’ research team.
“The region is an indispensable producer, taking advantage of multiple resource types,” Fastmarkets senior lithium analyst Robert Searle said. “Mine supply is 470,000 tonnes of [lithium carbon equivalent (LCE)] currently and forecast to rise to 875,000 tonnes of LCE by 2030.
“[A total of] 80% of mined production in the region is processed into value-added products [carbonate, chloride, hydroxide], largely due to brine operations that require processing on site, but also due to government policy pushing for domestic value-addition. The majority is carbonate, around 90%, which is forecast to remain the dominant salt,” he added.
According to Searle, South American carbonate remains one of the lowest-cost options in the market.
“In 2025, 80% of the carbonate produced in South America was shipped to buyers in China, with 16% supplied to Japan and [South] Korea,” he said. “Smaller volumes went to the US as well. With limited cathode active material capacity in South America, export market will continue to be dominant. Market participants in South America can continue to operate even at the price bottoms and low levels that we have seen over the past few cycles.”
Meanwhile, market participants highlight the challenges that the region faces, such as poor infrastructure, production in remote areas, impurities in output, government intervention, unclear rules for licensing, regulatory fragmentation and difficulty in gaining access to funding. These must all be overcome for projects to succeed in the near future.
On March 11, José Antonio Kast was elected president of Chile, marking a swing to the political right following the left-winger Gabriel Boric.
According to Fastmarkets’ research team, following the election of Kast, the mining sector is to be merged into the Ministry of Economy in Chile. This could be seen as a signal of the declining importance of the mining sector in Chile.
“In the long term, we do not expect much incremental supply growth from producers other than SQM, given Chile’s strict control over ownership and brine production,” Fastmarkets’ latest long-term forecast said.
“The new government has more capacity in moving forward projects in Chile, but it has other priorities. Mining will not be a big focus because of other challenges. So I do not expect big changes,” Daniel Jimenez, managing partner at iLiMarkets, said.
Chile’s mining minister, Aurora Williams, said in October 2025 that the country’s National Lithium Strategy would survive political cycles and that whoever is elected president will continue the long-term policy of political leadership.
The National Lithium Strategy in Chile is characterized by state-owned companies Codelco and ENAMI playing leadership roles, so that the state retains a majority stake in projects deemed strategic for the country.
On January 27, SQM confirmed its merger with state-owned Codelco. From January 1, 2031, Codelco will assume majority control and management of the company. The merger was a key pillar of the National Lithium Strategy, under which Codelco will take a dominant position in any resource considered strategic.
Other projects keep going in Chile with the support of the government. The Laguna Verde project from CleanTech Lithium has been awarded a Special Lithium Operating Contract (chief executive officer (CEOL) by Chile’s Ministry of Mining.
The CEOL gives the legal and commercial foundation to develop a direct lithium extraction (DLE) project with a 40-year contract covering the full project lifecycle, from exploration through to production and beyond.
Ignacio Mehech, chief executive officer at CleanTech Lithium, told Fastmarkets that the company believes that the incoming government has a clear vision of the importance of developing the country’s natural resources as quickly and efficiently as possible.
“We expect to see reductions in the processing time for environmental permits. This would be a major incentive to encourage greater investment in the country,” he said.
The Laguna Verde project is the most advanced project of its kind in Chile, he said, and has a real chance of being the first new lithium-producing project in the country in the past 30 years. “If all goes well, we could be producing lithium by the end of 2030,” he said.
Lithium-ion battery supply chain consultant Jose Hofer told Fastmarkets that some market participants believed that projects would gain immediate momentum after the election, but Chile must navigate environmental obstacles that the previous government put in place.
“The new administration has appointed new people and they will scan the situation. There’s massive imbalance of public debts to resolve, for example,” Hofer said.
For Searle, the trend of resource nationalism is playing out across several critical mineral and battery raw material markets.
“South American market participants exhibit resource nationalism in the lithium market,” he said. “Chile has a state-led strategy, where projects must involve state participation. This has seen an increased role for Codelco. It aims to raise revenue for the state. Chilean lithium reserves are controlled by the state. In Argentina, the key difference is that mineral resources are under provincial control [Catamarca, Jujuy and Salta] rather than the federal government. So, there is still control of mining concession grants and royalty negotiations.”
“This should not come as a surprise,” Searle added, “with nations looking to protect reserve levels and ensure effective deployment and royalty generation, as well as potentially managing ownership structures on geopolitical concerns. Countries in Africa and South America are absolutely within their rights to look to develop domestic industry – and not just to remain extraction sites for end-users in developed markets.”
Brazil is currently seen as a low-cost reference compared with other global spodumene producers. But in recent months, there have been growing market rumors regarding Sigma’s production issues and the timeline for the expansion at its Grota do Cirilo 2 project.
Brazilian exports of spodumene dropped in 2025 compared with 2024, according to data from Comex Stat. The change in lithium production from Brazil is primarily attributable to Sigma Lithium, the largest lithium producer in the country. The company suspended sales in the third quarter of last year because it faced cash-flow pressures and a high debt ratio.
Sigma announced the restart of mining activities in early February 2026.
For iLiMarkets’ Jimenez, Brazil might face some challenges. “Brazil’s production is essentially Sigma. Sigma is not doing well, so it’s kind of uncertain and brings concerns about lithium in the country,” he said.
Other factors that market participants are monitoring in the Brazilian lithium market are: the discussion regarding a bill put forward by Brazilian congressman Arnaldo Jardim, called PL2780, to establish the National Policy for Critical and Strategic Minerals (PNMCE), and that in 2026 Brazil will face a general election, whose results might affect the mining sector.
The government under Javier Milei has a pro-business agenda and is introducing a broad program of legislation intended to make the country more attractive to investors, including tax, customs and foreign exchange incentives.
Argentina introduced in 2024 the RIGI incentive regime for large investments, which provides financial leverage for various sectors – including mining – as well as tax, customs, forex and regulatory stability to last 30 years.
Ganfeng and Lithium Argentina have recently submitted an application to join the RIGI for the Pozuelos-Pastos Grandes project, for example.
Argentina is set to receive a lot of private capital, with a high percentage of salt flats in foreign hands. But despite its good position in the lithium industry, market participants note that the country must address its challenges, such as lack of regulatory predictability and lack of infrastructure such as transmission lines and logistics at ports.
According to Fastmarkets’ research team, the country’s current production process has largely underperformed due to the limitations on lithium extraction technology, equipment and electricity supply.
Luis Lucero, the country’s secretary of mining, said in October 2025 that infrastructure remained a challenge, but that Argentina’s strong fundamentals and transparent regulatory framework offered stability suitable for long-term investment.
“Projects in Argentina are up and running,” Jimenez said. “Argentina is an attractive investment destination; there’s less fear than there used to be about the country. Argentina is working to create macroeconomic stability. Capital interest in Argentina is going to be strong, including investment by non-Chinese companies, because of the good relationship between Milei and [US President Donald] Trump.”
In February, the US and Argentina signed an agreement on critical minerals.
For Hofer, there are good surprises coming in Argentina, with new companies applying for RIGI and the presence of the US in the continent.
Meanwhile, independent lithium and battery market consultant Eduardo Gigante believes the effect of the agreement has yet to be felt. “China is the lithium mine for the world,” he said. “The US does not have a lithium value chain developed. It’s more political than economical… I do not see any significant changes in the lithium market in Argentina. It is important to note that Argentina does not have traditional mining, such as Brazil and Chile, for example.”
Jérôme Pécresse, chief executive for aluminium at Rio Tinto, wrote on a social media that Argentina is the hub of its global lithium business. “It is rare to see such alignment between a company’s strategy and a country’s national priorities,” he said.
Bolivia has huge potential, driven by Chinese and Russian investment, according to Fastmarkets’ research team. The country awarded the rights to develop projects in the Uyuni and Oruro salt flats to a consortium that includes CATL and CMOC. State-owned producer Yacimientos de Litio Bolivianos (YLB) will play a central role in the project that hopes to create two lithium plants.
Before his election win in October 2025, new national president Rodrigo Paz had previously said there were plans to restructure state-owned companies such as YLB and to place the indigenous community and the country at the center of lithium development.
“I see no production in the near future,” Gigante said. “The government will not change, the value chain belongs to the state; the legal framework is poor, and needs to be more open to foreign opportunities. Besides, the resources are high in impurities and there are also big conflicts with indigenous communities.”
For Jimenez, Bolivia is very unpredictable. “I do not see any fundamental production shift changes in the next 7-8 years,” he said. “With the government and the indigenous communities, it’s very difficult to do things. The big resources have very complex salt flats, also.”
Lithium prices were up at the end of last year and the beginning of 2026.
“We currently are in a bullish phase,” Searle said. “Lithium-ion battery demand from electric vehicles [EVs], energy storage systems, consumer electronics and battery swaps were up by 41% year on year in 2025. EVs remains the major end-use market for lithium demand and batteries, but demand – previously very EV-focused – is now diversifying faster than ever. Growing deployment of renewable energy. combined with a potential boom in demand from AI data centers – is spurring bullish demand outlooks for lithium from this sector.”
According to Searle, the other side of the story on lithium moving into this new bullish price cycle is the slowing growth in mined supply seen in 2025, potentially leaving the market exposed.
“Strong demand growth is nothing new for the lithium market, but tonnage gain is outpacing mine supply,” Searle said. “These developments and market trends together mean that there’s the forecast to see a tightening market in 2026 and 2027, with demand forecast to outpace supply.
“Fairly normal conditions suggest we are seeing a price correction from an extremely bearish price environment in 2024-25,” he added. “The supply side conditions are there for a meaningful price recovery. A lot depends on demand and wider EV adoption, and macro economic growth. We think that China is unlikely to be able to add massive capacity at the same rate to manage prices as it did in 2022-23.”
Fastmarkets’ experts are embedded in this market, providing price data and market intelligence to help you make sense of today and tomorrow. Stay informed through our news, forecasting and analysis. Find out more about our lithium market insights today.