Argentina Eyes $5.6 Billion In Lithium Exports By 2025
Argentina is planning to boost its lithium exports to 200,000 tons over the next three years, expecting revenues to hit $5.6 billion by 2025, Mining.com has reported, citing government information. This should rise further to $8.7 billion by 2030.
At the moment, Argentina’s lithium production capacity stands at 37,500 tons but actual production is less than that, at 33,000 tons annually.
Argentina is one point of the so-called lithium triangle that also includes Chile and Bolivia and contains most of the world’s lithium. The commodity has become very hot in recent years because of the push for the electrification of global transport.
As a result, Argentina enjoyed a 234-percent surge in its lithium exports last year, with those representing a fifth of all mined commodity exports for the country.
In the first quarter of the year, Argentina’s lithium exports surged 133 percent in terms of value to a total of $233 million. March was the best month of the three, with lithium exports up by 93 percent on the year and worth $91 million.
Lithium export revenues for the full year are seen at some $6 billion, according to the country’s economy ministry.
Argentina has the world’s third-largest lithium reserves, which represent 9 percent of global reserves. Together with Chile and Bolivia, the country accounts for 60 percent of the world’s lithium reserves.
JP Morgan has estimated that thanks to its lithium riches, Argentina could become the third-largest producer of the metal in the world by 2030.
At the same time, because of the danger of a supply squeeze in lithium, EV makers are considering alternatives to the currently dominant battery technology. This might cast a shadow over the long-term prospects of the lithium triangle, but none of the challenging technologies have yet made a dent in lithium demand.
By Michael Kern for Oilprice.com
The Pastos Grandes lithium project is in the Salta Province of Argentina.
In Argentina’s mountainous north, a strong pipeline of lithium projects close to coming online looks set to unlock a wave of production that could see its output of the key electric vehicle battery metal as much as triple within the next two years.
The world’s fourth largest producer of the silvery-white metal sits within the so-called “lithium triangle” and has been luring investment from Canadian to Chinese mining firms with a regional and market-led model, even as a wave of resource nationalism has spread in the region.
Neighboring Chile, the region’s top lithium producer, last week unveiled plans for a state-led public-private model, spooking investors. Bolivia has long maintained strict control over its huge though largely untapped resources, while Mexico nationalized its lithium deposits last year.
In Argentina, despite state energy firm YPF starting to explore for lithium last year, the sector has largely been driven by private enterprise and regular approvals of new projects as the government has looked to bring in more export dollars through mining, a rare bright spot amid economic turmoil.
“Argentina has granted concessions to projects for the last 10 years,” said Franco Mignacco, president of Argentina’s Chamber of Mining Business. “That’s why today we have this level of lithium investment and development and the chance of growth.”
Mignacco estimated that Argentina’s current 40,000 tonnes of lithium carbonate production could triple by 2024-2025 to 120,000 tonnes, which could take it past China and closer to Chile which currently produces some 180,000 tonnes per year.
That would be driven by new projects coming online on top of the two currently in production. The country has six lithium projects under construction and 15 in the advanced exploration or feasibility stage, Mignacco said.
That contrasts with Chile, where the industry is dominated by established players SQM and Albemarle, with few new projects underway. In Bolivia the government only recently okayed a new project by a Chinese consortium.
Argentina’s production boost would come from the expansion of the only two producing operations – US firm Livent’s Fénix project in Catamarca and Australian Allkem Ltd’s Salar de Olaroz mine in Jujuy – both expected to double output to 42,500 tonnes in the years ahead.
These would be joined by the Cauchari-Olaroz project, owned by China’s Ganfeng Lithium Co and Canada’s Lithium Americas Corp, which in the second half of 2023 is set to begin production with capacity for 40,000 tonnes of lithium carbonate.
‘Pro-market strategy’
Argentina, Bolivia and Chile together sit atop half of the world’s resources of the mineral under otherworldly salt flats in the high-altitude Andean plains.
But strategies for developing it are diverging.
“Argentina’s lithium sector has thrived through a decentralized, pro-market strategy,” said Benjamin Gedan, director of the Latin America program at The Wilson Center, adding in contrast Bolivia’s lithium sector had “repeatedly stalled as a result of excessive state control.”
Chile, he said, may have found a “savvy middle ground” with its public-private model, which would hand the state majority control over all new lithium projects in a nationalist shift, but would still give private enterprise a key role to play.
The wave of resource nationalism had prompted some talk amongst officials of a potential OPEC-style lithium cartel in the region, though analysts see it as unrealistic given the diverse industry models and levels of development.
Argentina, meanwhile, faces challenges including economic turmoil with high inflation and capital controls which complicate business, while the country is headed for general elections in October creating political uncertainty.
Its lithium pipeline, though, may keep the sector bubbling and even gaining ground on rivals. Overtaking neighbor Chile would be highly unlikely but some analysts were aiming high.
“Chile today produces and exports much more lithium than Argentina,” said Natacha Izquierdo, analyst at consultancy ABCEB. “But if the projects we have here today come to fruition, Argentina could overtake it.”
(By Lucila Sigal and Rodrigo Campos; Editing by Adam Jourdan and Marguerita Choy)
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