Lithium Hopes Rise Across South America

Investor interest rises as reforms and new extraction methods boost South America’s lithium outlook

17 Nov 2025

South America is attracting renewed attention as governments in Chile, Argentina and Brazil move to clarify rules for lithium extraction, prompting a rise in investor engagement after a period of caution. The change comes as battery makers and energy groups seek reliable sources of the mineral, driven by expanding electric vehicle and storage markets.

Officials across the region have introduced policy updates aimed at creating more predictable operating conditions and reducing the environmental footprint of new projects. Authorities are encouraging “direct lithium extraction” and other emerging methods intended to use less water than traditional evaporation ponds. Investors are revisiting prospects that combine production scale with credible sustainability plans. One analyst said South America remained one of the strongest candidates for future battery mineral supply, adding that the next investment cycle would favour companies able to show both efficiency and environmental accountability.

Major producers, including Rio Tinto, are examining opportunities linked to lower-impact technologies, while several battery manufacturers have highlighted the region’s long-term potential once projects demonstrate consistent performance. Their assessments reflect industry efforts to diversify supply chains as automakers raise output targets for electric vehicles.

Progress, however, continues to be shaped by shifting regulations, lengthy permitting processes and community concerns over land and water use. Critics argue that regulatory uncertainty may slow investment decisions, but supporters of current reforms say the measures are designed to deliver a clearer and more stable environment for operators. Analysts note that although changes are gradual, recent moves suggest a more constructive policy trend.

As global competition for battery minerals intensifies, South America is positioned to play a larger role in the clean energy economy. If current reforms are maintained and projects advance as planned, the region could supply a growing share of the lithium required for electric vehicle fleets and renewable energy systems.