Chile, China, Argentina, Australia, and possibly Bolivia could be the big geopolitical winners if the rise of electric vehicles boosts the status of lithium as a strategic resource.
But in a review of global lithium markets—and the wide gap among the various analyses of available reserves—Greentech points to an important difference between lithium and oil: since lithium is fully recyclable, the low-carbon transition won’t necessarily shift geopolitical power from today’s petro-states to a new generation of lithium barons.
“If EV demand really does skyrocket in coming years, countries with major lithium resources will have far greater power than they do in today’s economic and geopolitical hierarchy,” writes lawyer and renewable energy consultant Tam Hunt. But “even if lithium batteries do start to significantly displace internal-combustion engines, we won’t necessarily see a ‘lithium politics’ replace today’s ‘petropolitics.’”
Following a detailed review of U.S. interests in today’s fossil fuel politics, Hunt says a Lithium Producing and Exporting Countries organization analogous to OPEC will “quite likely” form in a low-carbon future. “Will China lead the future LPEC? My guess is yes, based on its huge reserves and its increasing desire for global recognition and leadership,” he writes. “The key takeaway from this speculative analysis seems to be that the rise of EVs and lithium-ion batteries may contribute to the rise of China and a non-Western global power structure.”