Chapter 4 provides a comprehensive contextual analysis of lithium policies within the Latin American framework, focusing on the global and regional significance of lithium extraction. It begins by highlighting the critical role of lithium in addressing the global climate crisis, with its applications in electromobility and energy storage providing a pathway to reducing greenhouse gas emissions. With demand for lithium rising exponentially, particularly from China and other technological powers, the chapter emphasizes the mineral's importance in the energy transition and economic development of exporting countries, especially within the ‘Lithium Triangle’ (Chile, Argentina, and Bolivia). The chapter also addresses the socio-environmental conflicts arising from lithium extraction and the complexities surrounding its industrial policy. In addition, it explores the global economic dynamics and value chains in the lithium industry, focusing on the leading exporters (Australia, Chile, and China) and importers (China, Japan, and South Korea). This section concludes with an examination of the political economy of lithium and the associated policy challenges for developing nations, balancing the tension between market forces and environmental concerns.