How Chile can expand from lithium mining to a Latin American center of battery production

• Chile is a key player in the global transition to electric vehicles, holding 31% of the world’s lithium reserves and supplying more than 20% of global lithium production.
• Development of a domestic battery value chain, from cathodes to battery packs, could generate an annual product of US$12.3 billion in 2035 and up to 32,600 jobs by 2035.

Santiago, Chile. October, 8th, 2025 – A new joint report from The International Council on Clean Transportation (ICCT) and Centro Movilidad Sostenible (CMS) presents how Chile can leverage its position as the world’s second largest lithium producer to onshore additional steps in the battery value chain and become a Latin American hub for electric vehicle battery production.

Currently, Chile contributes more than 20% of global lithium production and holds 31% of global reserves. With increasing electric vehicles sales in major markets, global lithium demand is expected to increase by a factor of 3 until 2035. Chile’s lithium mining and refining industry can benefit greatly from this development: According to the announced projects analyzed in the ICCT-CMS study, national production capacity is expected to increase from 42 kt in 2024 to 64 kt in 2030 and to 79 kt in 2035. This increase in lithium production alone would create revenues exceeding USD $8.9 billion in 2035, equivalent to 2.7% of Chile’s 2024 GDP.

Simply exporting this lithium to other markets, however, gives away much of Chile’s economic potential in the ever-growing EV battery markets. As the ICCT-CMS study highlights, using lithium production to leverage an expansion of the supply chain to cathode production and cell manufacturing could generate an annual gross product of US$12.3 billion and up to 32,600 jobs by 2035. This is under the assumption that Chile could supply the entire Latin American EV battery market. The development of cathode manufacturing alone would generate up to US$2.2 billion and 3,700 jobs in that same year.

With global efforts to reduce the climate impact of industries and materials, Chile’s vast lithium deposits provide a competitive advantage: Lithium production from brines in the Atacama salt flat generates 86% fewer greenhouse gas emissions than lithium production from hard rock mines in Australia. Likewise, due to the high share of renewable electricity in Chile, the average emission intensity of battery production is estimated to be 35% lower than the average emissions intensity of battery production in China, 16% lower than in the United States, and 9% lower than in Europe.

However, the ICCT-CMS report underscores the importance of moving forward with sustainable lithium mining practices that include reducing water consumption in arid salt flat regions where water scarcity is a critical issue, pursuing consistent consultation with indigenous communities early on in the mine development process, protecting ecosystems by formalizing the network of protected salt flats and wetlands, and creating infrastructure for battery recycling to allow for mineral recovery while generating employment.

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 ICCT-CMS report highlights the opportunity for Chile to transition from being an exporter of lithium to a Latin American center of electric vehicle battery production, contributing to mitigating climate change and the country’s sustainable economic development.

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Read this press release in Spanish.

Media contact:
Diana Pino, Sr. Communication Specialist for Latin America, ICCT
Stefano Sacco, Battery and Minerals Sustainability Lead, CMS

Publication details
Title: Expanding the lithium value chain in Chile: Mining, batteries, and recycling
Authors: Eyal Li, Stefano Sacco, and Georg Bieker

About the International Council on Clean Transportation
The International Council on Clean Transportation (ICCT) is an independent research organization providing first-rate, unbiased research and technical and scientific analysis to environmental regulators. Our mission is to improve the environmental performance and energy efficiency of road, marine, and air transportation, in order to benefit public health and mitigate climate change. Founded in 2001, we are a nonprofit organization working under grants and contracts from private foundations and public institutions.

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www.theicct.org
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About Centro de Movilidad Sostenible
The Centro de Movilidad Sostenible (CMS) is a leading Chile-based non-profit accelerating the decarbonization of transportation across Latin America and the Caribbean. Partnering with governments and industry, CMS designs and implements policies focused on expanding electric mobility, enhancing vehicle efficiency, and building responsible battery value chains. CMS is also an active member of international initiatives such as the Extractive Industries Transparency Initiative (EITI), the Initiative for Responsible Mining Assurance (IRMA), and the Global Battery Alliance, helping align Latin America’s transition with global standards for transparency and sustainability. Key achievements include supporting Chile’s national energy efficiency law and some of the largest electric bus deployments outside of China.

Find us at:
https://cmsostenible.org/
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