Why China and Three Other Nations Control the Global Lithium Supply

The race for lithium dominance has become central to the global energy transition. With electric vehicle adoption accelerating and energy storage demands soaring, understanding which countries control the world’s battery metal reserves has never been more critical. Four nations—China, Chile, Australia, and Argentina—collectively hold the keys to meeting projected surging demand.

The Growing Urgency Behind Lithium Demand

Lithium-ion battery demand is accelerating at a pace few predicted. Industry forecasts predict that combined electric vehicle and energy storage system demand for lithium will surge by over 30 percent annually in 2025 alone. This explosive growth stems from a simple reality: lithium, alongside cobalt, forms the backbone of modern battery technology powering everything from EVs to grid-scale storage systems.

The global implications are staggering. Total lithium reserves worldwide currently stand at approximately 30 million metric tons—yet demand could quickly outpace supply if production doesn’t keep pace. This scarcity has transformed lithium reserves into a geopolitical asset.

Mapping the Four Lithium Superpowers

Chile’s Dominant Position: 9.3 Million Metric Tons

Chile remains the lithium reserve heavyweight, controlling 9.3 million metric tons—roughly one-third of the world’s economically extractable lithium. The Salar de Atacama region alone houses approximately 33 percent of global lithium deposits, making it the planet’s most concentrated lithium basin.

Yet production doesn’t match reserves. In 2024, Chile produced only 44,000 MT, ranking second globally. This paradox reflects regulatory constraints. The Chilean government, recognizing lithium’s strategic value, announced partial industry nationalization in 2023. State-owned Codelco has since negotiated controlling stakes in SQM and Albemarle’s operations, fundamentally reshaping the country’s lithium landscape.

In early 2025, Chile opened bidding for seven lithium operation contracts, signaling renewed efforts to accelerate production while maintaining state control.

Australia’s Production Prowess: 7 Million Metric Tons

Australia holds the world’s second-largest reserves at 7 million metric tons, yet achieved what Chile could not—it became the world’s largest lithium producer in 2024. The distinction matters: Australia’s reserves exist as hard-rock spodumene deposits, fundamentally different from Chile’s brine-based lithium.

Western Australia dominates production, home to the historic Greenbushes mine operated since 1985. However, recent research points to untapped potential across Queensland, New South Wales, and Victoria. Emerging maps identifying high-lithium-density regions suggest Australia’s production capacity could expand significantly beyond current levels.

Recent price volatility has prompted some producers to curtail operations, but the underlying deposit quality positions Australia as a long-term supply backbone.

Argentina’s Rising Momentum: 4 Million Metric Tons

Argentina holds 4 million metric tons and ranks fourth in global production at 18,000 MT annually. Yet the real story lies in expansion potential. Forming part of the “Lithium Triangle” alongside Chile and Bolivia—which collectively contain over half the world’s reserves—Argentina is attracting major investment.

Rio Tinto’s 2024 announcement to invest $2.5 billion in capacity expansion at the Rincon salar exemplifies this momentum. The company plans to scale production from 3,000 to 60,000 MT by 2028, a 20-fold increase. Earlier, Argentina approved Argosy Minerals’ expansion to boost capacity to 12,000 MT annually. The government’s $4.2 billion commitment to lithium development signals long-term strategic focus.

China’s Strategic Challenge: 3 Million Metric Tons

China’s 3 million metric tons represent only 10 percent of global reserves, yet this masks China’s outsized influence. Despite modest reserves, China produced 41,000 MT in 2024 and controls roughly 60 percent of global lithium processing capacity and battery manufacturing.

This paradox—lower reserves but dominant processing power—reflects China’s import strategy. The nation imports the majority of its lithium needs, primarily from Australia, then processes and transforms the raw material into finished batteries for global EV and electronics markets.

China’s competitive positioning has drawn scrutiny. In late 2024, the US State Department accused China of predatory pricing practices designed to suppress competition. However, Chinese media reported in early 2025 that national lithium reserves have surged significantly, with a newly discovered 2,800-kilometer lithium belt in western regions adding over 6.5 million tons of proven reserves—potentially reshaping global supply dynamics if extraction accelerates.

The Broader Lithium Landscape

Beyond the Big Four, significant reserves exist globally:

• United States: 1.8 million MT
• Canada: 1.2 million MT
• Zimbabwe: 480,000 MT
• Brazil: 390,000 MT
• Portugal: 60,000 MT (Europe’s largest)

Geopolitical Implications and Market Dynamics

The concentration of reserves in four nations has created strategic interdependencies. Chile and Argentina’s regulatory frameworks favor state involvement, potentially constraining rapid production scaling. Australia’s democratic governance and proven mining expertise enable faster expansion. China’s processing dominance means even suppliers with abundant reserves depend on downstream Chinese transformation.

This creates a complex supply ecosystem where reserve size doesn’t automatically translate to production capacity or market influence. The next phase of lithium competition will pit reserve holders against processing powerhouses, with geopolitical considerations reshaping traditional supply chains.

Looking Ahead

As lithium demand continues its steep trajectory, nations and companies holding significant reserves face mounting pressure to balance environmental concerns, regulatory requirements, and production expansion. The winners won’t necessarily be those with the largest reserves—they’ll be nations that can efficiently extract, process, and deliver lithium to battery manufacturers reliably and cost-competitively.