This Country Holds One of the Largest Lithium Reserves, But No One Wants to Mine It

Lithium is often called the “white gold” of the energy transition. From powering electric vehicles to storing solar energy, it’s a critical piece of the global green puzzle. But having lithium in the ground is one thing. Getting it out—and turning it into something useful—is a whole different story. And one country is finding that out the hard way.

The Tug-of-War Between Extraction and Processing

It sounds like a dream scenario: sitting on a treasure trove of lithium while the world scrambles to secure supplies. But in practice, it’s more like an economic puzzle with missing pieces.

Countries like Mexico have taken bold steps to nationalize their lithium resources, hoping to ensure that profits from this booming sector stay within national borders. The government’s plan was ambitious: build local capacity, attract electric vehicle manufacturers, and tap into the growing demand accelerated by U.S. clean energy incentives.

In reality? It’s been a tough sell. Many private companies have been reluctant to partner with a state-led system where they must share profits and face regulatory complexity. As a result, actual lithium mining activity has barely budged.

The challenge is not just digging up the mineral. The real value lies in processing it into battery-grade material—a step that requires advanced infrastructure, capital, and technical know-how. Without this, the lithium remains just another rock in the ground.

Chile Faces a Familiar Dilemma

Further south, Chile, which holds some of the world’s largest lithium reserves, is facing a similar fork in the road. The government has announced plans requiring majority state ownership in any new lithium ventures—a move that may seem politically sound but has rattled investors.

“Money is a coward. It flees at the first sign of trouble,” said Robert Friedland, CEO of Ivanhoe Mines, in an interview with Bloomberg. It’s a blunt but telling summary of how international capital tends to behave. And in a business where it can take up to 10 years for a lithium mine to reach full production, stability and confidence matter.

At a time when global demand is exploding—especially from China and Europe—the world needs more lithium, fast. And yet, major reserves are being left untapped, not because they’re inaccessible, but because the investment climate is too uncertain.

Prices, Demand, and a Race Against Time

Even though lithium prices have dropped from their record highs, they remain well above historical averages. Analysts from firms like Morgan Stanley still warn of a potential shortfall of up to 22% by 2030 if new projects don’t accelerate. And that shortfall could be devastating, particularly for regions like Europe, which is racing to electrify its vehicle fleet but still lags behind in battery production.

In contrast, China continues to dominate, selling electric vehicles (EVs) by the millions and securing lithium contracts worldwide through both state-owned enterprises and partnerships with Western carmakers.

Some automakers are starting to hedge their bets by partnering directly with mining companies to lock in future supply. It’s a sign of just how strategic lithium has become—not just a commodity, but a geopolitical asset.

A Valuable Resource, Stuck in Limbo

The irony here is hard to miss: countries with some of the richest lithium deposits can’t fully benefit from them. Whether it’s political caution, economic nationalism, or plain old red tape, the result is the same: the world needs more lithium, but much of it is sitting untouched underground.

For lithium-rich nations, the question is no longer “Do we have enough?” but “Can we turn it into long-term value without scaring off investment?” And for the rest of the world, the race to secure this critical resource is only heating up.