China's growing dominance over the lithium value chain is entrenching a "predominantly extractive" model in Latin America, leaving the region to bear the environmental and social costs of mining while Beijing captures higher-value processing and manufacturing, a coalition of civil society groups warned in a new report.

The Collective on Chinese Financing and Investments, Human Rights and the Environment (CICDHA) said Chinese investment in the region is focused on securing supplies of lithium carbonate for China's technology and EV industries rather than fostering local industrialisation such as battery manufacturing.

"We are in the last stage of the value chain, which is only extraction, not even refining," said Lucio Cuenca, director of the Latin American Observatory of Environmental Conflicts (OLCA), which forms part of the Collective, according to Bloomberg Linea.

"I believe that unfortunately there is a tremendous challenge to continue striving to move towards changing the production models of our countries and moving away from this predatory extractivism," Cuenca added.

China currently controls around 65% of global lithium refining and leads production of batteries and electric vehicles, according to figures presented at the report's launch. In 2024, Latin America exported more than $3bn in lithium carbonate, of which 80% was absorbed by China. In Chile, the region's largest lithium market, 77% of so-called white gold exports were destined for the Asian giant, according to research group Latinoamérica Sustentable (LAS).

Mining has accounted for roughly 40% of Chinese investment in Latin America over the past 25 years, with a growing concentration in the lithium sector, according to the report.

The report, titled “China's Presence in the Lithium Sector in Latin America and the Caribbean”, identified around 60 mining projects involving Chinese companies in the region, concentrated mainly in the extractive phase but with increasing participation across other links in the global lithium chain. A deeper analysis of 20 projects spanning Argentina, Bolivia, Brazil, Chile and Mexico found company involvement ranging from extraction and processing to battery assembly and electric vehicle production.

Marco Gandarillas, a senior researcher at LAS, said lithium had become "a key element in relations between Latin America and China," describing it as a "21st-century strategic mineral" given its centrality to electromobility, energy storage and renewable energy development, with more than 60% of global demand linked to those applications.

"Latin America, although it is a large reservoir of mineral resources, falls into a chain where there is a predominance of China, but in a subordinate position, as a supplier of resources in a still very extractive phase," Gandarillas told Bloomberg Linea.

Argentina concentrates the largest number of lithium mining projects in the extractive phase, while Brazil stands out in battery assembly and electric vehicles, and Bolivia has agreements for direct lithium extraction projects that remain at an early stage and have already generated environmental and social controversy, the report found.

Chinese companies singled out in the study include Tianqi Lithium and Ganfeng Lithium, which have expanded from processing into primary extraction, as well as CATL and BYD, which are investing in extraction, refining and battery manufacturing. Other groups including Zijin Mining, Tsingshan, CITIC Guoan and Hanaq are also reportedly diversifying into lithium mining as part of a broader push into critical minerals for the energy transition, according to the report.

A detailed review of 10 Chinese projects found that all presented risks to indigenous and local communities. Eight showed risks of water overexploitation, eight faced questions over incomplete environmental assessments, six had transparency and access-to-information deficiencies, and five carried environmental contamination risks. Some impacts were identified as potentially irreversible.

The CICDHA flagged water stress in the arid "Lithium Triangle" spanning Argentina, Bolivia and Chile as a major concern, alongside the absence of free, prior and informed consultation processes with indigenous communities, which it said was fuelling social conflict.

The group acknowledged a raft of environmental and social mining guidelines issued by Beijing in recent years, including corporate social responsibility directives for overseas investments from 2017 and mineral supply chain due diligence guidelines from 2022. A first mediation and consultation mechanism for Chinese mining companies operating abroad was established in 2023. However, researchers said these standards remain little known and poorly enforced in practice.

The CICDHA called for the establishment of no-exploration zones in ecologically sensitive areas or where community consent is absent, binding environmental, social and governance standards across the lithium value chain, stricter environmental and social impact assessments, and the creation of grievance and redress mechanisms for affected communities.

The watchdog argued that the urgency of global decarbonisation should not serve as justification for weakening human rights and environmental protections in the Global South.