News Latin America Argentina’s lithium pipeline promises ‘white gold’ boom as Chile tightens control

Argentina’s lithium pipeline promises ‘white gold’ boom as Chile tightens control

In Argentina’s mountainous north, a robust pipeline of lithium projects poised to come online looks poised to unlock a production spree that could triple its output of the key metal for electric vehicle batteries in 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 attracting investment from Canadian mining companies to ones in China with a regional, market-led model, even as it has extended a wave of resource nationalism 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 kept a tight rein on its enormous, albeit largely untapped, resources, while Mexico nationalized its lithium deposits last year.

In Argentina, despite the fact that the state energy company YPF YPFD.BA began exploring with lithium last year, the sector has been largely driven by private company and periodic approvals of new projects, as the government has sought attract more export dollars through mining, a rare bright spot amid the economic crisis.

“Argentina has granted concessions to projects for the last 10 years,” said Franco Mignacco, president of Argentina’s mining business chamber. “That’s why today we have this level of lithium investment and development and the potential for growth.”

Mignacco estimated that Argentina’s current 40,000-ton lithium carbonate production could triple by 2024-2025 to 120,000 tons, which could take it beyond China and closer to Chile, which currently produces about 180,000 tons per year.

That would be driven by new projects coming online in addition to the two currently in production. The country has six lithium projects under construction and 15 in the advanced exploration or feasibility stage, Mignacco said.

pro-market strategy

Argentina, Bolivia and Chile together sit over half of the world’s mineral resources under otherworldly salt flats on the high-altitude Andean plains.
But the strategies to develop it are divergent.

“Argentina’s lithium sector has prospered through a decentralized, pro-market strategy,” said Benjamin Gedan, director of the Latin America program at The Wilson Center, adding that, in contrast, Bolivia’s lithium sector ” has repeatedly stalled as a result of excessive state control.”

Chile, he said, may have found a “smart middle ground” with its public-private model, which would hand majority control of all new lithium projects to the state in a nationalist shift, but still give private company a key role. .

The wave of resource nationalism has sparked some talk among officials about a possible OPEC-style lithium cartel in the region, though analysts see it as unrealistic given the various industry models and levels of development.

Meanwhile, Argentina faces challenges including economic turmoil with high inflation and capital controls complicating business, as the country heads to general elections in October, raising political uncertainty.

However, its lithium pipeline may keep the sector buzzing and even gain ground on rivals. Overtaking neighboring Chile would be highly unlikely, but some analysts were aiming high.

“Chile today produces and exports much more lithium than Argentina,” said Natacha Izquierdo, an analyst at the consultancy ABCEB. “But if the projects we have here today come to fruition, Argentina could get ahead of us.”

Source: VOA Espanol



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