Building The Pan-American Lithium Super-Corridor

Why Lithium Is Now a Strategic Battery Mineral

As EVs, electrification of heating and industry, and overall energy consumption increase, so does the need for energy storage. To this day, the most widespread solution is lithium-ion batteries.

The reason why lithium is so powerful for energy storage stems from its fundamental electrochemical properties.

Lithium is the lightest solid element, with the atomic number 3 (only 3 protons in its nucleus).

Lithium atoms’ small size means that they have only one electron on their outer shell, and when this electron moves to another atom, it gives them an enormous electric potential change per atom.

So while other elements might be easier to work with or cheaper, lithium is the go-to atom to use for high-performance and high-energy density in batteries.

And battery demand is exploding. Because an EV consumes as many batteries as hundreds or thousands of electronic devices, the electrification of transportation has made all the battery production before the EV revolution look like a footnote of history in comparison.

Source: Statista

Besides EVs, data center backup, grid stabilization units, and the need to compensate for intermittent production of renewables are all now driving greater demand for energy storage.

As lithium became the cornerstone element for electrification, it is a strategic resource determining if a country can manage to modernize its industry, transportation, and decarbonize its economy.

For these reasons, lithium is now classified as a critical mineral by the U.S., Canada, the EU, and Japan.

Why Lithium Localization in the Americas Matters

A Geopolitically Sensitive Mineral in China’s Supply Chain

As for many other key minerals, like rare earths, lithium is mostly refined and turned into useful components in China.

Battery-grade lithium is highly purified, at least at 99.5%, but often up to 99.9%, 99.99%, or even 99.999% for improved performance and battery durability.

Battery-grade level of lithium purity is harder to achieve and requires specialized infrastructure and expertise. Currently, it is a specialty of Chinese producers, with around 67% of the global lithium supply processed by China.

This puts America and Canada in a potentially difficult spot, as trade wars and geopolitical tensions with China remain very intense.

The dominance of China stems in part from its Belt and Road Initiative, and it is likely that an equivalent will need to be built to balance it out in the lithium sector, as well as other critical minerals.

Americas’ Lithium Potential

Luckily, the Americas are very rich in lithium. In fact, the region has the largest deposits of lithium in the world, followed by equally friendly Australia. So the question is more to bring back home the rest of the supply chain, from refining to battery & EV manufacturing, and recycling.

The largest proven reserves of lithium are located in the lithium triangle (Bolivia, Argentina, and Chile), giving the region the largest potential for future production growth.

Together, these three countries represent almost 50% of the world’s lithium reserves. The USA itself is also very rich in mostly undeveloped lithium deposits.

Source: UFine Battery

As both Japan and Europe are rather poor in lithium resources, a powerful Pan-American lithium supply chain will help American allies to reduce their dependency on China as well.

“More investment in raw material refining and processing is still required to shift away from China for battery material supply.

CEA’s ESS Supply, Technology, and Policy report

New Policies: IRA Tax Credits and ‘Friend-Shored’ Lithium

The IRA (Inflation Reduction Act), which directs how a lot of industrialization and green energy policy is organized, has been designed to boost the domestic lithium supply chain.

Notably, it requires “friend-shored” minerals to unlock federal tax credits. If the supply matches this criteria, project developers can choose between 2 options:

• An investment tax credit (the 48C credit, with up to 30% of capital investment in tax credit).
• A production tax credit (the 45X credit), standing at $35 per kilowatt-hour (kWh) for domestically produced battery cells, $10/kWh for domestically produced battery modules, and a 10 percent production cost credit for mining critical minerals and producing electrode active materials.

Source: Columbia University

These domestic US goals match the industrial policy targets of South American countries, eager to contribute to a larger segment of the lithium supply chain than just mineral extraction.

The main interest of South American producers is to ensure a stable supply and lithium prices to limit the brutal boom and bust of the lithium market. Meanwhile, a stable and reliable supply is required to build the electric supply chain in the USA.

These common interests come with the background that diplomatic relations between the US and the lithium triangle nations are improving quickly:

• Argentina says trade deal with the US is practically finalized.
• Recently elected Bolivia’s President Paz is resuming diplomatic relations with the US at the ambassadorial level after a 17-year break.
• Western mining giant Rio Tinto (RIO -1.06%) and Chilean state-owned company Enami are progressing on a $3.2B lithium project.
  • In parallel, an interim trade agreement between the EU and Chile was the first EU trade agreement to include a separate chapter on energy and raw materials.

So while these nations will likely keep some ties to China, the possibility of diversifying their buyers will keep the idea of a Pan-American Lithium Super-Corridor very attractive.

Key Components Of The Pan-American Lithium Super-Corridor

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Step 1: Extraction

When it comes to the lithium triangle, three different adjacent regions are important:

• Chile’s Salar de Atacama.
• Argentina’s Catamarca/Salta brine fields.
• Bolivia’s Salar de Uyuni.

All three areas are rich in lithium due to their desert climatic conditions, with many salt flats. These former seas contain brines (water rich with dissolved minerals), which are where the lithium is found.

The most lithium-rich is Salar de Atacama in Chile, with the highest concentration of lithium (0.15% by weight) among all the world’s brine sources.

Source: The Economist

A big advantage of this lithium source is that most of the energy required to produce this lithium is provided by the abundant sunlight in the desert in evaporation ponds.

It is, however, a very water-intensive production method, straining already limited water resources in the region.

Source: Saint-Gobain

Local communities in Chile, Argentina, and Bolivia are increasingly concerned about water rights and environmental impacts, making permitting and social license major factors for long-term output.

Step 2: Refining & Conversion

This step was mostly done in China so far, and converts the relatively rich mineral extracted from rocks or brine into an industrial-grade lithium extract.

It is now shifting to North America, as any pretense of building an EV or battery supply chain without this step would not reduce vulnerability to the Chinese government.

A series of lithium mines in construction or expansion in the USA and Canada are planning to vertically integrate refining as well. For example, this includes:

• Thacker Pass in Nevada: a project by Lithium Americas(LAC +4.61%), with the world’s largest known measured sedimentary lithium resource and reserve for a single location (85 years life of mine).
• Carolina Lithium, in North Carolina, and North American Lithium in Quebec: built by Elevra (ELV -1.93%), the result of the $1.2B merger of Piedmont Lithium and Sayona Mining, with other lithium assets in Ghana, and Western Australia.Elevra is also building a $500M lithium hydroxide conversion facility in Tennessee.
• Nemaska Lithium, in Quebec as well, was developed by the company with the same name.
• The SeymourProject by Green Technology Metals and the Lake Superior Project by Avalon Advanced Materials, both in Ontario.

Meanwhile, other refineries are being built as well, for example, Mangrove Lithium is already building a refinery in Delta, British Columbia, and is planning another one in a still-to-be-determined location in North America.

Tesla (TSLA -1.88%) also launched its first lithium refinery in the USA, in Texas, in 2024, for a 50GW capacity.

Step 3: Battery Component Manufacturing

Once purified to battery-grade levels, the lithium still needs to be manufactured into the component that goes into batteries and assembled into a functional battery.

This effort is led by some of the global leaders in battery manufacturing:

• Ultium(GM (GM +0.03%)+ LG Energy): located in Ohio and Tennessee, this joint venture between the American automaker and the Korean battery manufacturer started battery cell production in 2022. It has a 45 GW capacity and received a $2.5B loan from the US Department of Energy.
• Panasonic: The Japanese company is building a new automotive lithium-ion battery factory in Kansas, aiming for an annual capacity of 32 GWh. This will add to its existing Nevada Factory with a 41 GWh.
• SK On: The Korean company is looking to become one of the largest battery suppliers to the USA, notably with an agreement to supply Nissan with nearly 100 GWh of U.S.-made batteries from 2028 to 2033. The company also has a joint venture with Ford called BlueOval, with SK having overall plants in Quebec, Kentucky, Georgia, and Tennessee.
• LG is planning to start production in the first half of 2026 at its battery factory in Arizona.

Newcomers to the industry were also expanding in North America, but many faced issues with ramping up production and raising enough funds. For example, the FREYR $2.6B factory in Georgia was canceled, and the Northvolt Quebec plant was canceled due to the company’s bankruptcy.

Among car makers, some are directly taking into their hands the supply of batteries. This is especially true of Tesla, as the EV company is notorious for favoring as much vertical integration as possible, building a lot of its own batteries, when it is not buying them from global suppliers.

A Volkswagen-PowerCo factory is also under construction in Ontario, with PowerCo, the Volkswagen group battery branch, potentially producing QuantumScape’s (QS +0.15%) solid-state batteries in the future.

Step 4: EV & Grid Storage Integration

As mentioned above, many auto manufacturers are either vertically integrating battery production, like Tesla and Volkswagen, or building a joint venture with battery makers like GM with Ultium.

In most cases, some supply from other battery suppliers is also in order, either for specific battery designs for a given car model or to complement the automaker’s own production.

Some others are fine with tapping into the existing and growing supply chain, as we discussed with Nissan, or as Rivian did with a 5-year battery deal with LG.

Another key element of the lithium supply chain in North America is the growing application of grid-scale energy storage.

This demand will likely not only use lithium-based batteries, but as the most mature technology and almost the only battery chemistry able to be produced at a massive scale, lithium will be important for grid storage solutions for many years.

Tesla has emerged as a provider of such solutions, with Elon Musk describing this business as “growing like wildfire” and potentially “growing much faster than the car business”.

Utility companies are also key in deploying large battery packs for the electric grid. For example:

• Fluence Energy(FLNC -1.22%): a Siemens and AES joint venture with 41 GW of energy storage from 265 energy storage projects.
• NextEra (NEE -1.29%): this large renewable energy utility has been developing roughly 2.8 GW of U.S. battery storage capacity through 2024 and is widely regarded as a global leader in utility-scale energy storage.

 Step 5: Recycling

For now, the explosive growth of battery demand from EVs has guaranteed that most of the lithium used is from fresh sources.

However, as a large volume of EVs will reach their end of life, and later on, utility-scale battery parks, a lot of lithium can be produced from used batteries as well.

And in any case, properly handling these hazardous materials is a must for the battery supply chain to be sustainable.

Several companies are building up recycling capacity, usually relying on so-called “black mass”, or thinly grinding down batteries:

• Li-Cycle, acquired by mining giant Glencore in the summer of 2025, formed Glencore Battery Recycling, with locations in Canada, Italy, and Morocco.
• Redwood Materials (private): the company both produces batteries for backup power applications, claiming the lowest cost per kWh of installed batteries in the US, and can recover more than 95% of critical materials from recycled electronics and batteries, like lithium, nickel, cobalt, and copper.
• Cirba Solutions (private): the company utilizes a proprietary cryogenic process for pre-treating all highly reactive lithium batteries, reducing fire risks and enabling further physical separation.

Future Technology: Direct Lithium Extraction (DLE)

Direct lithium extraction targets the lithium atoms through a selective extraction process. This can be achieved through a few different methods, instead of relying on evaporation and/or mineral concentration.

It can be achieved through a few different methods:

• Adsorption-based DLE, where the lithium is physically absorbed by a dedicated material.
• Ion Exchange-Based DLE, where the lithium is exchanged against cations (positive ions).
• Solvent Extraction-Based DLE, where an organic liquid solvent absorbs and dissolves the lithium away from the brine.
• One last method was published recently, EDTA-aided loose nanofiltration (EALNF) to extract lithium.

The company Arcadium, acquired by Rio Tinto (RIO -1.06%), has been working on direct lithium extraction (DLE) since 1996, in combination with evaporation ponds, and recently made significant progress in making it commercially viable as a stand-alone extraction method. In addition, Arcadium acquired ILiAD Technologies in 2023, which was developing a selective adsorbent for a “vast range of lithium laden brines under a wide variety of conditions”.

Even more advanced Electrochemical Lithium Extraction (ELE) could also become a possibility, as a 3-chamber electrochemical reactor developed at Rice University could maybe open the way for that method to become economically and industrially viable.

Overall, it is possible that in the long run, a new type of lithium deposit or a new method of extraction will be used to produce this battery material.

But for now, considering the gigantic volume required, it is likely that a full integration of the Lithium Triangle raw resource production and North American refineries, battery production, auto manufacturing, and recycling will be the main driving force of the industry in the coming decade.

Conclusion: Why the Pan-American Lithium Super-Corridor Matters

The Pan-American Lithium Super-Corridor is slowly emerging from a mix of private initiative, public tax incentives, and geopolitical reorientation of supply chains.

This continent-spanning megaproject will define the next generation of battery supply chains, and radically alter how EVs and grid storage are built, while fostering greater Western independence from China.

Albemarle stands out as the strongest publicly traded North American investment directly tied to this megaproject, as it is one of the largest purely lithium-focused stocks available.

Investing In The Pan-American Lithium Super-Corridor

Albemarle Corporation: Flagship Corridor Stock

Albemarle offers investors a mix of brine and spodumene-sourced (hard rocks) lithium and is the world’s largest lithium producer.

Albemarle

Among other chemicals produced in parallel to lithium can be mentioned bromine, used in industrial water treatment, and flame retardants.

Albemarle is also the owner of Ketjen, a provider of advanced catalyst solutions to leading producers in the petrochemical, refining, and specialty chemicals industries.

Source: Albemarle

The company’s largest segment is the energy storage segment (battery-grade lithium), followed by chemical specialties and Ketjen.

Source: Albemarle

Albemarle has mining operations in South America, Australia, and the USA, as well as refineries in the USA, China, and Germany.

Source: Albemarle

Due to the low lithium price, the company has put on hold most of its expansion plans, cutting growth capex by more than $1.3B since 2023 to save cash.

It is also on the way to save up to $400M from improvements in its cost structure (energy efficiency, fewer management layers, etc.) and increased productivity (yield improvements, plant ramp-ups, common ERP platform, etc.).

Thanks to these improvements, the company expects to reach breakeven free cash flow with $300M-$400M in 2025.

Source: Albemarle

The company is also looking to improve its environmental profile, with, for example, 24% of total purchased electricity coming from renewable energies in 2024 and the development of a comprehensive Product Carbon Footprints (PCFs) measurement.

(You can read more about Albermarle in our dedicated investment report.)

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