Expandiendo la cadena de valor del litio en Chile: Minería, baterías y reciclaje
Report
Expanding the lithium value chain in Chile: Mining, batteries, and recycling
A new report by the International Council on Clean Transportation (ICCT) and Centro Movilidad Sostenible (CMS) outlines how Chile can move beyond lithium exports to become a regional leader in electric vehicle battery production. The analysis also assesses the GHG emissions intensity, water consumption, and social impacts of lithium mining and battery production in Chile, in addition to opportunities for battery recycling.
Results of this analysis include the following:
Lithium-ion battery demand from BEVs is projected to rise rapidly in Chile. Total battery demand from battery and plug-in hybrid electric vehicles is estimated to rise from 0.5 GWh in 2024 to 13.0–17.8 GWh in 2030 and to 27.7–38.0 GWh in 2035. This corresponds to an increase in Chilean lithium demand from vehicles from 44 t in 2024 to 1.1–1.5 kt in 2030 and to 2.3–3.2 kt in 2035.
Lithium production capacity in Chile is expected to increase markedly by the end of the decade. The total announced lithium production capacity in Chile is projected to rise from 42 kt in 2024 to 64 kt in 2030 and 79 kt in 2035. Chile’s lithium export revenue is projected to amount to $7.3 billion in 2030 and $8.9 billion in 2035, which correspond to 2.2% and 2.7% of the country’s 2024 GDP, respectively.
Expanding Chile’s current lithium mining and refining capacities to cathode production can provide considerable revenue and job potential. The production of cathode material alone could generate up to $1.1 billion in annual revenue in 2030 and $2.2 billion in annual revenue in 2035 when meeting the lithium-iron phosphate (LFP) demand from vehicle batteries in the Latin American market. The onshoring of LFP cathode material production could create 900–1700 jobs in 2030 and 2100–3700 jobs in 2035.
Onshoring battery cell production can provide additional revenue and job potential. Developing each stage of the value chain needed to meet the projected demand for vehicular LFP batteries in Latin America could generate an annual gross product of up to $6.1 billion by 2030 and $12.3 billion by 2035. This could also lead to the creation of 19,000–32,600 jobs by 2035. Setting up an efficient battery collection and recycling ecosystem in Chile would allow the recovery of valuable minerals and create additional jobs.
Figure. Projected gross revenue from the development of battery supply chain industries to meet the demand for LFP batteries in Latin America
Batteries produced in Chile would have a lower life-cycle GHG emission intensity compared with other battery producing regions around the world today. The GHG emission intensity of lithium carbonate from Chilean brine is estimated to be 86% lower than that produced from Australian ore, and 67% lower than lithium carbonate produced in the United States. The average emission intensity of LFP battery pack production in Chile is estimated to be 35% lower than the average emissions intensity of LFP batteries in China, 16% lower than in the United States, and 9% lower than in Europe.
The lithium mining industry has disrupted communities and raised the cost of living in mining regions, and expanded mining activity could pose environmental risks for local ecosystems. The water consumption of lithium mining from brine in Chile is similar to that of hard rock mining in other regions but is of higher concern given the aridity of the desert ecosystems where salt flats are located. Freshwater consumption could be partially mitigated by technological improvements in lithium mines. Furthermore, the government so far has not consistently engaged local communities early in mine consultation processes. International best practices for due diligence requirements and community engagement could provide governance models for the Chilean government to mitigate the social and economic impacts of the lithium mining industry.
The analysis also puts forward policies for consideration that include incentives for the domestic production of battery and cell materials, such as the expanded provision with mining companies to reserve lithium quotas at preferential prices for value-added projects in the country, as well as regulations to reduce water use and greenhouse emissions in mines, reforms to the public consultation process to strengthen social participation and trust in the industry, and establishing extended producer responsibility regulations for battery collection and recycling.
The report summary is available here.