When the Anglo-Persian Oil Company, now British Petroleum, discovered Iranian oil in 1908, a century of petroleum energy primacy followed. The same is rapidly becoming true for minerals like lithium, copper, cobalt, nickel, and rare earth elements (critical minerals) necessary for technologies that produce, transmit, and store electricity. These elements can be found all over the world, but China controls nearly all critical mineral supply chains. Today, the United States needs critical mineral access more than it depends on foreign oil. The greatest opportunity remaining for U.S. critical mineral independence hinges on South American lithium.

Like internal combustion engines and oil, Electric Vehicle (EV) lithium-ion batteries are “driving demand for batteries and related critical minerals,” according to the International Energy Agency. The market cap for critical minerals grew from $160 billion in 2018 to $320 billion in 2022, primarily due to an increase in EV sales that rose from 2 million to over 10 million during the same period. Road transportation has long been the backbone of oil demand globally, and now, the same relationship is unfolding for critical minerals. And like oil shocks, even if felt by manufacturers before consumers, Americans will be more vulnerable to critical mineral price spikes as our vehicles and grids modernize.

The countries the United States needs to prioritize to head off exponentially growing lithium battery demand depend on the battery composition the United States ultimately bets on. Lithium leads the battery race because it is the metal with the greatest energy-to-weight ratio. Within these batteries, there is competition between Nickel-Manganese-Cobalt (NMC) and Lithium-Iron-Phosphate (LFP) cathodes. Both use lithium to store and release electricity. LFP just uses more common materials—and more lithium—to complete the circuit through your device. Moreover, NMC provides higher energy storage for the greater driving range in cars, but LFP is cheaper, safer, and quickly closing the energy storage gap with NMC.

While both NMC and LFP are commercially viable options, they are not equal in terms of U.S. national security. NMC batteries depend on China’s near-monopoly over Congolese cobalt and trade sway over Indonesian nickel, the two largest global reserves and productions of their respective minerals. And China has a history of using critical mineral exports as leverage. Because LFP batteries could sooner achieve independence from China, the United States understands their strategic value, hence the planned public-private installation of the first LFP cathode facility in the United States and a national goal to eliminate cobalt and nickel in batteries by 2030. Engineering toward LFP would still require the United States to invest in the lithium processing and battery manufacturing that China presently dominates, which can be addressed with enough time and investment through domestic and multilateral industrial policies—easier said than done. However, sourcing enough lithium to meet domestic demand calls for the tried-and-true bilateral approach.

Just as it was in the United States’ interest to secure a better relationship with Saudi Arabia in 1945 to ensure a constant flow of oil, it is now in the United States’ interest to establish the stable relationships necessary to underpin lithium imports upon which U.S. national and economic security rely. Securing the majority of domestic battery demand will require the United States to leverage the 54 percent percent of proven world reserves of lithium underneath the “lithium triangle” between Chile, Argentina, and Bolivia and the 24 percent of global reserves in Australia. Mexico is also weighing in by seeking a lithium association with Argentina, Bolivia, and Chile—evoking comparisons to the Organization of Petroleum Exporting Countries. In exchange, Latin America wants trade agreements and financing to industrialize and recover from a legacy of “foreign harassment,” as Bolivian President Luis Arce puts it.

Lithium discoveries in Maine in July and Nevada in September do not mean U.S. lithium independence anytime soon. Domestic oil was not enough to sate American demand during the twentieth century, and domestic lithium will not be enough for the short to medium term. Meeting projected U.S. demand for EVS will require 300 percent more lithium carbonate equivalent by 2050 than the entire world annually produces today—765,570 tons in 2022—compounded by global lithium trends that project roughly 3-4 million tons of demand by 2030, while only slated to produce 2.7 million tons the same year.

This is why securing a stable and sufficient lithium supply for Americans rests on the United States reconciling a legacy of resource exploitation and political intervention in Latin America; this history has colored lithium nationalization strategies in Mexico, Chile, and Bolivia, and Chinese contracts are taking advantage of lagging U.S. investment and public relations in the region. This year, China is helping Chile build a processing plant in exchange for discounted lithium and a $290 million lithium cathode factory. In July, China invested $620 million to create an electric vehicle plant in Brazil on a facility Ford recently abandoned. Since 2018, China has accounted for 88 percent of all money spent on lithium merger and acquisition deals over $100 million in Latin America. The United States must convince critical mineral nations in the region that history will not repeat itself by offering more favorable terms.

Striking competitive critical mineral partnerships will also take more than money, which is China’s main advantage. Thanks to a different suite of incentives controlled by an autocratic regime, the Chinese Communist Party is willing to invest for reasons other than profit and without concern for regulatory, environmental, or political risk. For the United States and its allies to compete with the Belt and Road Initiative, it will have to up the ante through technology sharing, resources to streamline and better standards for environmental licensing, and joint oversight to protect labor and transparency.

First, technology sharing helps critical mineral states enjoy the technology their labor makes possible. Second, well-equipped licensing bodies can both raise the bar for environmental stewardship and shorten the lengthy approval process of environmental regulations bottlenecking mineral supply. Third, joint oversight protects workers and gets ahead of informal economy bribes that steepen private investment costs. On the surface, transnational oversight may not appeal to some corrupt government officials in Latin America, except following the recent regional groundswell of discontent driven by corruption, flipping more than a couple of heads of state, a favorable domestic optic of transparency tied to billions in foreign investment can. The United States’ best chance for a competitive edge in the Latin American lithium trade, counterintuitively, is underwriting joint legal frameworks, given that technology partnerships, humane standards, and private investment all rely on the rule of law.

Future technology and decarbonization expect critical minerals to become the most demanded global commodity—after fossil fuels reach their tragic or managed conclusion. In the meantime, the geopolitics of resource security will continue to play out between incumbent petroleum on the one hand and rising critical minerals on the other. At least for batteries, it is in the United States’ self-interest to build a deeper, not necessarily broader, critical mineral coalition to support its economic and national security, like it once did with the Arab Gulf.

Alex Elnagdy is the assistant director of the Atlantic Council’s Scowcroft Middle East Security Initiative.

Image: Shutterstock.