A Just Energy Transition? The Impacts of Lithium Extraction on the Andean Salt Flats of Argentina, Bolivia, and Chile

Written on 13 May 2025. Posted in News

BY JOSÉ AYLWIN FOR INDIGENOUS DEBATES

The rapid extraction of lithium from the high Andean salt flats has caused serious harm to Indigenous Peoples’ right to a healthy environment and access to water. It has particularly affected traditional activities such as camelid herding (llamas, guanacos, and vicuñas) and the cultivation of quinoa and maize. Given the central role that lithium now plays globally in the energy transition, and the concentration of its reserves in this region, it is crucial to ask whether the transition is truly just for these peoples and their communities. All the evidence suggests that it is not — and that fundamental changes are urgently needed.

Due to the climate crisis caused by the intensive use of fossil fuels and polluting industrial development processes, States have committed to advancing the transition towards renewable energy sources. However, the energy transition — as agreed upon by States through various international agreements — demands the intensive use of natural resources such as copper, cobalt, nickel, manganese, and lithium. This has led to an unprecedented expansion of extraction into pristine territories and ecosystems, many of which have been traditionally inhabited by Indigenous Peoples.

In this context, lithium has become a strategic resource. As an alkaline metal found in both rocks and in marine and continental waters, it possesses properties that make it ideal for energy storage. As a result, lithium has become a key mineral in the production of rechargeable batteries. Demand for lithium has grown exponentially in recent years and is expected to increase eighteenfold by 2030 and sixtyfold by 2050.

The so-called "lithium triangle", encompassing deposits located in the high Andean salt flats of Argentina, Bolivia, and Chile (ABC region), has gained global significance, containing 53% of the world's identified lithium reserves. Production from these brine deposits, combined with hard-rock lithium extraction in Australia, accounted for 75% of global production in 2023. Argentina and Chile alone contributed one-third of the world's total lithium output. Although Bolivia's production is still in its early stages, its salt flats contain the world's largest known lithium reserves.

The Development of Lithium in the High Andean Salt Flats

In Chile, lithium extraction in the Atacama Salt Flat began in the 1980s under state leadership. Sociedad Química y Minera de Chile (SQM) and Albemarle, the companies that now dominate the market, are however controlled by private national and international conglomerates from the United States and China. Chile is currently the world’s second-largest lithium producer, after Australia, and has been implementing a National Lithium Strategy since 2023. Meanwhile, the state-owned company CODELCO, the world’s leading copper producer, has partnered with SQM to exploit lithium from the Atacama Salt Flat and has acquired a project in the Maricunga Salt Flat, located within the traditional territory of the Colla people. In 2024, the government invited foreign investors to exploit other salt flats, with nearly 50 companies responding.

In Argentina, lithium extraction began in 1997 when the U.S.-based FMC Corporation initiated operations at the Salar del Hombre Muerto in the province of Catamarca. In the 21^st century, new projects were launched in Jujuy, Salta, and Catamarca, particularly at the Caucharí-Olaroz and Pastos Grandes salt flats. Argentina is the world’s fifth-largest lithium producer, with an 87.5% increase in annual production in 2024. Today, pressure from the industry, along with provincial and federal legislation promoted by the government of Javier Milei, is extending to potential deposits in the Salinas Grandes and Laguna de Guayatayoc basins, further escalating social conflict.

In Bolivia, lithium exploration in the Salar de Uyuni began in the 1970s and, in 1980, the government granted a license to the American company, Lithium Corporation (Lithco), whose presence was however short-lived. In 2008, the government of Evo Morales introduced a policy of state control and established a plan for lithium industrialization: pilot plants were set up, and agreements were signed with foreign companies. Lithium carbonate production, which began in 2013, remains limited due to technological gaps, administrative challenges, and social conflicts. Since 2017, the state-owned company, Yacimientos de Litio Bolivianos (YLB), has been responsible for development and has called on foreign companies to submit proposals for Direct Lithium Extraction (DLE) in Uyuni and six other salt flats. Following processes marked by a lack of transparency, the Russian-based Uranium One Group and the Chinese Hong Kong CBC Investment Limited were selected.

The high Andean salt flats of Argentina, Bolivia, and Chile (ABC) are territories traditionally inhabited by various Indigenous Peoples. For over 13,000 years, these communities have developed an agro-pastoral culture adapted to high-altitude ecosystems ranging from 2,000 to 4,000 meters above sea level. It is estimated that over a dozen Indigenous Peoples live around these areas, such as the Aymara, Quechua, Lipeño, Atacameño, and Colla, descendants of the Tiwanaku and Inca cultures, distributed across more than 200 communities. While these communities have diversified in recent decades, incorporating both small and large-scale mining (such as copper and lithium) and tourism, their economies have traditionally centered around the husbandry of camelids (llamas, guanacos, and vicuñas) and the cultivation of traditional crops such as quinoa and maize, which are vital to their cultures and worldviews.

The Impact on Human Rights

Alongside the violation of property rights over their lands and traditionally occupied territories, which, as they are not recognized or titled in favor of the communities, are taken over by companies exploiting lithium, one of the most affected rights is the right to participation, consultation, and consent. With the exception of a few recent cases in Chile and Argentina, lithium operations have not been properly consulted in good faith with the aim of reaching an agreement or consent with the communities that could be directly affected, as required by ILO Convention No. 169.

In the few cases where lithium operations approved by the states have been consulted, they have suffered from procedural shortcomings, being limited to certain aspects of the projects consulted with a few communities. In none of these consultations regarding development plans or large-scale investments with a significant impact on Indigenous territories has free, prior, and informed consent been obtained. Consequently, the right of these peoples to self-determination, as recognized by the United Nations Declaration and the American Declaration on the Rights of Indigenous Peoples, has been violated.

The impacts on Indigenous rights are compounded by the impacts on the environment and water. In the Atacama Salt Flat, the contamination caused by lithium extraction through the removal of brine and its settling in evaporation pools has been confirmed. In 2024, the University of Chile reported that the Atacama Salt Flat was sinking at a rate of 1 to 2 centimeters per year as a result of brine extractions. The same study also showed that the groundwater levels of the salt flat have fallen by more than 10 meters in the last 15 years. This has led to a significant loss of vegetation cover in areas used for agriculture and grazing, as well as the loss of lagoons.

Similar impacts on water have also been documented in the Salar del Hombre Muerto (Argentina), where companies have been operating for decades using the same intensive methods as in Chile. Compensation has rarely been provided for these environmental and social impacts. Far less have the huge profits that companies derive from lithium extraction been shared. In Chile, SQM reported revenues of 7.5 billion dollars in 2023 and 4.5 billion dollars in 2024.

The Injustice of the Energy Transition

To date, the only compensation for the destruction of Indigenous territories has occurred in Chile: in 2016, an agreement was made between Rockwood Lithium (Albemarle) and the Lickanantay people to include them in the benefits of lithium exploitation. Similarly, in 2018, the Production Development Corporation (CORFO, from Spanish: Corporación de Fomento de la Producción) signed an agreement with Sociedad Química y Minera de Chile: while the state agency authorized the company to extend its operations in the Atacama Salt Flat until 2030, SQM committed to making annual contributions to the Atacama communities. However, since the communities were not consulted, the agreement was challenged by the Atacameño Peoples Council.

Thus far, lithium development in Argentina, Bolivia, and Chile has caused significant violations of the rights of Indigenous Peoples living in the high Andean salt flats, as well as damage to the environment and water resources. Given lithium's central role in the global energy transition and the increasing importance of the lithium reserves in the Andean salt flats in recent years, it is crucial to ask whether this transition is truly fair to the peoples living in these salt flats. All signs indicate that it is not, and that fundamental changes are needed to ensure that the energy transition is genuinely fair.

As highlighted by the International Indigenous Peoples Rights (IPRI) report and the report from the Center for Information on Business and Human Rights (CIEDH) on Indigenous Peoples and the Just Transition, for the energy transition to be truly just, both states and companies must ensure respect for Indigenous Peoples' rights, including the right to consent, participation in benefits, and compensation for any damages caused. This is especially crucial when their territories are being impacted by natural resource extraction and processing projects. There is still a long road ahead to ensure that lithium development in the Andean salt flats of Argentina, Bolivia, and Chile is part of the “just energy transition” that states and companies claim to be promoting.

This article reports on progress in the research project "Impacts of lithium development on indigenous territories in Argentina, Bolivia and Chile" (No. 110326-001), which the Observatorio Ciudadano is conducting in collaboration with CELS in Argentina and CIDES UMSA in Bolivia, with support from IDRC in Canada.

José Aylwin is a lawyer at the Observatorio Ciudadano and a member of the Chilean Civil Society Platform on Human Rights and Business.

Cover photo: José Aylwin

Tags: Climate