In northern Argentina, a ‘white gold’ rush for metallic lithium EV accelerates, Auto News, ET Auto

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“Certainly lithium will replace biofuels,” said Alejandro Moro, managing director of Australian company Rincon Lithium.

SALTA: In the remote province of Salta, in northern Argentina, the silence of the desert landscape is only broken by the hum of machines pumping brine from salt water to extract lithium, a sign of accelerating efforts to ride the global electric vehicle boom.

Beneath the saline highlands of the South American country, accessible by winding mountain roads, lies buried the world’s third largest reserve of ultralight battery metal, which has seen soaring prices over the last decade. last year following a global push towards greener modes. transport.

Already the world’s fourth largest producer of lithium, Argentina’s national and local governments are now seeking to accelerate development, held back for years by bureaucracy, high tax rates, rampant inflation and currency controls.

Provinces like Salta are building regional mining logistics nodes and access roads, lowering tax rates and streamlining confusing rules for the sector to attract investment in the “white gold” metal.

This has seen a wave of new business, deals and plans to ramp up production, which could make Argentina a key player in the electric vehicle supply chain in the years to come, as demand with automakers and buyers like China set to step up.

Argentina could become the world’s largest producer of brines in less than a decade if the flow of projects is tracked and sustainedDavid Guerrero Alvarado, Consulting Consultant, Alpha Lithium

“Argentina could become the world’s largest producer of brines in less than a decade if the flow of projects is followed and sustained,” David Guerrero Alvarado, a consultant advising Canada’s Alpha Lithium, told Reuters in Salta.

Alpha Lithium is in the investigation phase for a project in the nearby Salar Tolillar, one of many early stage developments which, while showing promise, require an often lengthy and costly process to become a reality.

As countries around the world scramble to reduce their emissions, growing global demand for lithium and soaring prices have sparked increased interest in the so-called ‘lithium triangle’ that stretches across parts of the world. Argentina, Bolivia and Chile.

In Argentina, mining provinces such as Salta, Jujuy and Catamarca have taken steps to encourage suspicious investors, signing an agreement in June to create uniform rules and to “strengthen infrastructure, legal certainty and fiscal stability”.

Salta Mines and Energy Secretary Flavia Royon told Reuters the province could produce 200,000 tonnes of lithium carbonate equivalent per year by 2025, after going through a list of upcoming developments lithium.

That would be a huge ramp-up, equivalent to about a fifth of global production expected that year.

“There is interest in Salta and it is the Argentine province with the most lithium projects underway,” she said.

The country’s CMEA mining chamber predicts a nationwide drop of 175,000 tonnes by 2025, compared to an estimated 38,800 tonnes this year. But – with lithium projects often taking years to ramp up – this remains a lofty goal.

FUELS OF THE FUTURE

Argentina’s center-left government has made a conscious and strategic step towards lithium.

Last year he cut taxes on all mining exports from 12% to 8% and in April he eased capital controls on companies that withdraw foreign currency from the country for projects with investments of more than $ 100 million. He supported the state-owned energy company YPF to set up a lithium battery factory and is proposing a bill to reduce taxes on electric cars.

“We will focus on the fields and fuels of the future, which do not generate any polluting emissions, which are mainly hydrogen and lithium batteries,” Production Minister Matias Kulfas said in a recent meeting with journalists in Buenos Aires.

A source at the central bank, which is keen to replenish foreign currency reserves, said the country had seen growing investor interest in mining, especially lithium.

Australian Orocobre Ltd and US miner Livent Corp, which have supply links with Toyota Corp and BMW respectively, operate the two lithium production projects in Argentina out of a total of more than 60 projects proposed at various stages of development. .

Others in the country include Australians Argosy Minerals, Lake Resources and Greenwing Resources, as well as South Koreans Posco and Neo Lithium Corp, backed by Chinese CATL.

Chinese company Ganfeng Lithium Co Ltd is in a bidding war to buy Millennial Lithium Corp, an Argentinian company, after an anonymous battery maker competed with its $ 280 million bid.

Ganfeng and Lithium Americas aim to produce some 40,000 tonnes of lithium carbonate equivalent from the Cauchari-Olaroz mine, with production starting in 2022.

“UNSTABLE MACROECONOMY”

However, doubts remain as to whether Argentina can increase its lithium production as it has promised. Half a decade ago, under a pro-business government, the country expressed ambition to overtake Chile’s biggest producer, but failed to do so.

“Argentina has the resources, but to turn them into reserves and make plans (…) a set of clear and stable rules is needed,” said Natacha Izquierdo, based in Buenos Aires, analyst at the consultancy firm. Abeceb.

Alejandro Moro, managing director of Rincon Lithium, an Australian company that owns a concession on the Rincon salt works in Salta, agreed that obstacles remain to attracting capital.

“It is a country with a fairly unstable macroeconomy, with a high degree of taxes that are imposed on the capital that comes to invest,” he said.

The company operates a pilot plant on the apartments, nearly 4,000 meters (13,100 feet) above sea level. It pumps brine through pipes 30 meters underground, which is then refined to produce lithium carbonate. Rincon hopes to extract 50,000 tonnes per year by 2025.

Despite his reservations, Moro said he had become more optimistic about Argentina’s support for mining investments after meeting with senior officials a few weeks earlier.

Argentina, an agricultural powerhouse with abundant oilseeds, has for years focused energy subsidies on biofuels, but officials are now signaling a shift in priorities towards electric vehicles – and lithium.

“Certainly lithium will replace biofuels,” Moro said.


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