A researcher from Jeonbuk National University has published a study explaining why lithium rich Latin American countries have adopted different governance strategies despite facing similar economic pressures. Assistant Professor Seungho Lee from the Department of Spanish and Latin American Studies proposed a framework examining how Chile, Argentina, Brazil, Bolivia, and Mexico navigate external forces and domestic constraints in managing their lithium industries.
Lithium has become strategically important due to its essential role in lithium ion batteries for electric vehicles (EVs) and renewable energy storage systems used in decarbonization efforts. The demand for lithium in EV production is expected to grow at least 7.6 fold in the present decade. This has placed Latin American nations with abundant lithium resources at the center of global attention as governments worldwide seek to secure supply chains and control strategic sectors amid geopolitical competition and supply chain vulnerabilities.
Despite sharing similar economic incentives for greater state control, the five countries have pursued divergent paths in lithium governance. Chile prioritizes combining private investment with strategic oversight, while Argentina and Brazil maintain decentralized and market oriented approaches. Bolivia has adopted a radical state led model with fiscal policies that directly influence production, and Mexico has focused largely on rhetorical nationalization. These differences raise questions about what explains variants in resource nationalism despite shared structural incentives and favorable external conditions for state intervention.
Lee addressed this question through a two stage decision making framework published in The Extractive Industries and Society. His findings were made available online on June 5, 2025, and appeared in Volume 24 of the journal on December 1, 2025. The study highlights the reasons behind the divergent responses of lithium rich Latin American countries.
The framework identifies two critical stages in lithium governance decisions. In the first stage, global commodity price cycles and strategic competition create external pressures and opportunities for state intervention. However, these effects are mediated by the industrial maturity of each country’s lithium sector. Countries with more developed lithium industries respond differently to external pressures compared to those with nascent sectors. In the second stage, domestic political settlements ultimately determine the extent and form of state involvement in the lithium industry.
The findings carry important implications for external actors engaging with the Latin American lithium sector. Multinational firms and foreign governments must recognize the complex and heterogeneous nature of lithium governance regimes across the region. Engagement strategies should be calibrated to both external conditions and the level of industrial maturity, as well as to the political settlements that shape each country’s lithium sector at national and subnational levels.
The evolving global order, intense geopolitical competition, and anxiety over supply chain vulnerabilities have led to urgent concerns over supply chain resilience and national security. Governments across the globe are making substantial efforts to reaffirm control over strategic sectors, especially in the field of critical minerals. Lithium has become particularly important owing to its use in technologies aimed at decarbonization, including electric vehicles and renewable energy storage systems.
Latin American countries collectively hold some of the world’s largest lithium reserves, making the region central to efforts by governments and companies to secure future supply. The geographic concentration of lithium reserves and production means global demand for the mineral is expected to continue rising. Each country’s approach reflects a balance between attracting foreign investment, maintaining state control, and addressing domestic political considerations.
Chile has historically been a major lithium producer and has adopted a hybrid model that allows private investment under strong state oversight. Argentina and Brazil have largely maintained decentralized, market oriented regimes that encourage private sector participation. Bolivia has opted for a tightly controlled, state led system reflecting its political priorities. Mexico has emphasized nationalization primarily at the rhetorical level while actual implementation varies.
The study provides a useful starting point for examining how states navigate the interplay between external pressures and domestic structural constraints in governing lithium industries. As lithium demand continues to grow driven by the global energy transition, understanding these governance variations becomes increasingly important for policymakers, investors, and researchers.
Jeonbuk National University, founded in 1947, is one of ten Flagship Korean National Universities located in Jeonju, South Korea. The university has grown to include 16 colleges and 14 graduate schools with approximately 32,000 enrolled students. The institution maintains cooperative programs with international educational institutions and has positioned itself at the forefront of digital transformation through artificial intelligence (AI) driven education, research, and administration.
The Extractive Industries and Society is a quarterly peer reviewed academic journal established in 2014 and published by Elsevier. The journal focuses on disseminating in depth analysis of the socio economic and environmental impacts of mining and oil and gas production on societies. Topics covered include environmental management, corporate social responsibility, community development, corruption, industry reform, climate change, and taxation in the extractive industries sector.
