For much of the twentieth century, the geography of power was built around oil. States secured fields, built pipelines, protected maritime chokepoints, financed refineries and shaped alliances around access to energy. Oil did not explain the international system on its own, but it formed one of the invisible infrastructures of global power. The twenty-first century is not abolishing that logic. It is transforming it.

As economies electrify, vehicles become both energy and digital platforms, stationary storage expands alongside power grids, and governments seek to reduce their dependence on hydrocarbons, a new family of resources is acquiring strategic importance. Copper, nickel, cobalt, graphite, rare earths and lithium have gradually entered the vocabulary of economic security.

Among them, lithium occupies a distinctive place. Light, difficult to substitute in several current applications and essential to today’s rechargeable battery technologies, it has become one of the material symbols of the energy transition. According to the International Energy Agency, global lithium demand has grown by roughly 25% per year on average over the past two years, while global battery demand exceeded 1.5 TWh in 2025.

Yet speaking of a “lithium war” can be misleading if the confrontation is reduced to a race for deposits. Lithium exists in several regions of the world, and new resources continue to be identified. The real strategic scarcity lies elsewhere: in the ability to extract the resource economically, process it, manufacture battery-grade materials, produce cells, master industrial equipment and ultimately control the entire value chain.

The lithium war is therefore not simply a struggle over a raw material. It is a struggle over the control of an industrial system.

A resource turned strategic

Lithium was long a relatively discreet commodity. It was used in ceramics, glass, lubricants, certain alloys and pharmaceuticals. The rise of lithium-ion batteries profoundly altered its economics.

The expansion of electric vehicles became the first major accelerator. Stationary electricity storage is now becoming the second. As renewable generation expands, storage is becoming increasingly important for power systems, while the growth of data centres and the electrification of multiple end uses are reinforcing demand for energy infrastructure more broadly.

The scale of the transformation is striking. The U.S. Geological Survey estimates that global lithium production reached around 290,000 tonnes of lithium content in 2025, compared with volumes that were far smaller only a few decades ago. The International Energy Agency, meanwhile, expects lithium demand under its stated-policies scenario to rise to more than three times today’s level by 2040.

Lithium, however, is not geologically rare. This is one of the first distinctions necessary to understand the market. Significant resources exist across several continents and take different forms: continental brines, hard-rock spodumene deposits, clays and other geological formations.

What is scarce is the combination of conditions required to turn a geological resource into competitive industrial production: ore quality, access to water and energy, infrastructure, capital, technology, regulation, permitting timelines, industrial expertise and access to markets. A resource underground is not yet economic power.

The new lithium map

The current geography of lithium rests on several poles with very different characteristics. Australia has established itself as one of the sector’s major mining powers thanks to its hard-rock deposits. It benefits from a mature extractive industry, strong infrastructure and extensive experience in global mining markets.

South America represents the other major strategic region. Chile and Argentina exploit substantial brine resources in the Andean highlands. Together with Bolivia, they form what is commonly called the “lithium triangle”, a region containing major resources but displaying very different industrial trajectories.

Bolivia illustrates perfectly the distinction between resources and industrial power. Possessing immense geological potential guarantees neither high production nor a dominant position in global markets. Technological constraints, political choices, infrastructure and the ability to attract investment largely determine whether mining potential can be transformed into industry.

Other actors are advancing. Brazil is developing its production. New projects are emerging in Africa, including in Zimbabwe and Mali, among other countries with favourable geological formations. Canada is seeking to build a North American supply chain. The United States itself possesses significant resources and is attempting to accelerate their development. The mining map is therefore gradually becoming more diversified. The industrial map remains far more concentrated.

China and the real centre of gravity

This is where the core of the lithium war lies. China did not build its position simply by controlling mines. It built it through an integrated industrial chain: investment in overseas resources, refining, production of battery-grade chemicals, cathode and anode materials, cells, manufacturing equipment and battery production. This distinction is essential.

Mining lithium is not enough to produce a battery. Ore or brine must first be converted into chemical compounds meeting extremely demanding industrial specifications. Those compounds then feed into active materials, then cells, before being assembled into modules and packs for vehicles, grids or electronic devices.

At each stage, value added increases. At each stage, technological requirements, economies of scale and barriers to entry also become more significant.

The International Energy Agency has found that the geographic concentration of critical-mineral refining increased further in 2025. For most major energy-related minerals, China occupies a dominant position in intermediate or downstream processing. And the challenge goes beyond installed capacity: technology, specialised equipment, expertise and supplier networks now form an industrial ecosystem built over many years.

This is precisely what the United States and Europe are trying to rebuild. They are also discovering an industrial reality that is often obscured by the debate over natural resources: opening a mine is difficult, but recreating a complete value chain is more difficult still.

Washington wants to rebuild an American chain

The United States has gradually placed critical minerals at the centre of its industrial and national-security policy. The objective extends beyond lithium. Washington is seeking to reduce its vulnerability across a range of resources needed for energy, electronics, aerospace and defence. But batteries remain one of the most visible battlegrounds.

In August 2025, the U.S. Department of Energy announced plans to mobilise nearly one billion dollars in additional funding for extraction, processing and manufacturing technologies linked to critical minerals.

The American strategy relies on several levers: financial support for domestic projects, development of refining capacity, agreements with partner countries, supply-security measures, encouragement of North American production and efforts to reshore parts of the battery supply chain. The challenge, however, is substantial.

New capacity must compete with established producers that already benefit from scale, specialised suppliers, adapted infrastructure and, in some cases, lower energy or labour costs. The IEA estimates that capital costs for new refining projects outside the dominant producing country can be 20% to more than 150% higher, while operating costs are on average around 50% higher. Industrial sovereignty has a price.

Europe and the problem of dependence

The European Union faces a similar difficulty, compounded by a relatively limited domestic mining base and often lengthy project-development procedures.

The Critical Raw Materials Act reflects this new awareness. By 2030, the Union aims to extract at least 10% of its annual needs domestically, process 40% of its consumption and meet 25% of demand through recycling. Those objectives reveal a broader change in European economic policy.

For several decades, access to raw materials could largely be treated as a trade issue: companies bought on international markets what they did not produce locally. Rising geopolitical tensions, export controls and concentrated dependencies are gradually altering that logic. Availability is no longer sufficient.

Governments increasingly want to know who produces a resource, who processes it, under which jurisdiction, using which technologies and subject to which political constraints.

Globalisation once optimised supply chains for efficiency. The new minerals strategy must also optimise them for resilience.

Latin America wants more than the role of supplier

This transformation raises another question: the place of producing countries. For decades, many resource-rich economies followed the same structural model: export relatively low-value raw materials and import manufactured goods incorporating far greater value added. Could lithium offer a way out of that pattern?

Chile and Argentina do not necessarily want to remain simple suppliers of carbonate or other intermediate compounds. The larger objective is to attract more investment into processing, materials and potentially selected stages of battery manufacturing.

The IEA estimates that Latin America already produces roughly a quarter of the world’s lithium and that its output could increase by nearly 50% by the end of the decade. More broadly, the Agency considers that greater local processing of major critical minerals could significantly increase the economic value captured by the region. Industrialisation, however, cannot simply be decreed.

Competitive cell production requires scale, reliable energy, infrastructure, sophisticated chemical capabilities, technical skills, capital and, above all, sufficiently large end markets to justify investment.

The struggle for producing countries will therefore be as much a struggle against their own historical specialisation as a negotiation with the world’s major industrial powers.

Africa faces the same choice

The same question is emerging in Africa. Rapid development of new mining projects can generate export revenues, attract capital and improve infrastructure. It can also reproduce an old model: extract the resource, ship it abroad and leave most industrial transformation elsewhere. Lithium does not automatically change that equation.

For producing countries to retain more value, they must be able to develop at least some intermediate stages: concentration, chemical conversion, precursor production or integration into broader regional supply chains.

Several governments are therefore beginning to use restrictions on exports of unprocessed minerals as an industrial-policy instrument. The IEA has notably identified new trade restrictions affecting lithium in Zimbabwe.

Such measures can encourage local processing. But they also involve risk: forcing localisation without sufficient infrastructure, energy, skills and financing can slow investment rather than build industry. Once again, owning the resource is not enough.

Price as both weapon and weakness

The lithium war is also taking place in an extremely volatile market. The sharp price increases seen in the early 2020s triggered a wave of investment and encouraged numerous projects. Rising supply and slower growth in some market segments then led to a severe price collapse in 2023 and 2024. That decline produced a paradox.

It lowered battery costs and supported adoption, but it also weakened many producers and delayed some of the investment needed to diversify supply geographically.

The cycle then turned again. According to the IEA, lithium prices more than doubled between their low point and early 2026, driven by strong demand, particularly from energy storage, and tighter supply conditions.

Investment did not immediately follow. Capital expenditure by lithium-focused producers reportedly fell by around 40% in 2025, while exploration spending declined even more sharply. This volatility lies at the heart of the critical-minerals dilemma.

Very high prices stimulate investment but hurt downstream manufacturers. Very low prices help batteries and electric vehicles but can destroy the economics of new mines needed for diversification. An already integrated industrial power can often absorb such cycles far more easily than a new entrant.

The next front: technology and equipment

The confrontation is now moving beyond raw materials. In October 2025, China announced new restrictions affecting several parts of the battery supply chain, including certain cathode materials, precursors, graphite anode materials, as well as manufacturing technologies and equipment. This shift is strategically significant.

Controlling a resource makes it possible to restrict exports. Controlling technology makes it possible to slow the emergence of competitors capable of producing independently.

The logic is beginning to resemble that of semiconductors. In that industry, power does not lie only in the raw materials needed to make chips, but in a sequence of technologies, machines, software, patents and capabilities held by a relatively small number of firms and countries. Batteries may be moving in the same direction.

The next struggle may therefore no longer be primarily about the location of mines or refineries. It may be about the equipment required to manufacture materials, intellectual property, chemical processes and the engineers capable of operating the facilities. Lithium then becomes the entry point into a much broader technological contest.

Recycling as a new mine

Another transformation could gradually reshape the geography of the sector: recycling. Unlike oil, a metal contained in a battery does not disappear when it is used. A substantial share of lithium, nickel, cobalt and copper can in principle be recovered and returned to the production system.

As the first large generations of electric vehicles reach the end of their lives, used batteries will therefore become a new resource.

The IEA estimates that recycled materials could roughly double their contribution to supply by 2040 across major energy-transition minerals.

Yet concentration appears here as well. China currently accounts for more than three quarters of global battery pre-treatment capacity and around 90% of material-recovery capacity, according to the Agency. Even the “urban mine” already has its own geopolitics.

Over the longer term, recycling could still transform the equation. Countries with limited natural deposits but large electric-vehicle fleets could gradually accumulate significant stocks of secondary materials. The geography of resources would begin to overlap with the geography of past consumption. A battery sold today may become a strategic resource fifteen years from now.

After oil, another form of dependence

The energy transition has sometimes been presented as a gradual exit from the geopolitics of resources. It may instead change its nature. The oil system depended on a permanent flow: extract, transport, refine, burn and repeat. Minerals used in electric technologies follow a different logic. They require substantial initial extraction but can remain within the economy for long periods and be partially recycled.

The dependence is therefore not identical. But it exists. It moves from wells to mines, from oil refineries to chemical plants, from pipelines to industrial logistics networks and from hydrocarbon producers to holders of processing technology.

This new geography may even be more complex than the old one. Oil is a relatively standardised commodity traded on a highly liquid global market. A battery, by contrast, is the product of dozens of materials, industrial processes and technologies layered together. Vulnerability can therefore emerge at almost any point.

The war for value chains

This may be the real meaning of the lithium war. It is less a confrontation between countries seeking possession of a raw material than a contest between industrial systems seeking control over different stages of a strategic chain.

Australia holds major mining strength. Latin America controls a significant share of resources. China has built power in processing and manufacturing. The United States is trying to reconstruct a domestic and allied chain. Europe is trying to reduce dependency. African economies want to avoid reproducing the historical model of raw-material export. But no position is permanently secure.

Technology is changing. Lithium-iron-phosphate batteries have already altered the relative demand for certain metals. Sodium-ion batteries are advancing. Direct lithium extraction could change the economics of some deposits. Recycling could gradually reduce the need for primary extraction. New chemistries may still reshape the composition of future batteries. Today’s strategic resource is therefore never guaranteed to remain tomorrow’s. Industrial capability, however, endures.

The lithium war reveals a deeper shift in the global economy. After decades in which globalisation dispersed production according to efficiency and cost, major powers are rediscovering that certain industrial capabilities have strategic value even when their immediate economics are less attractive.

A mine provides a resource. A refinery provides capacity. A technology provides an advantage. But whoever controls the resource, its processing, the equipment, the expertise, the financing and the market simultaneously controls something far harder to replace: an industrial system. That is where the real lithium war is being fought.

Main sources

  • International Energy Agency, Global Critical Minerals Outlook 2026, July 2026.
  • International Energy Agency, Market Overview — Global Critical Minerals Outlook 2026.
  • International Energy Agency, Outlook — Global Critical Minerals Outlook 2026.
  • U.S. Geological Survey, Mineral Commodity Summaries 2026, National Minerals Information Center.
  • European Commission, European Critical Raw Materials Act.
  • U.S. Department of Energy, Actions to Secure American Critical Minerals and Materials Supply Chain, 2025.