Argentina is taking aggressive steps to attract international investors that will impriove its lithium industry
The country is taking aggressive steps to attract international investors with the hopes of one day producing around 45 percent of the world’s lithium — a key resource in making batteries for cars and phones.
Last week, the US Department of Energy met with Argentina officials for the second time to discuss possible mining opportunities in the northwest Province of Salta. The desert in said area makes up one part of the “Lithium Triangle” shared between Chile and Bolivia. Together, the area represents over 50 percent of the world’s lithium.
But for decades it was Chile, not Argentina, that led the charge on growing an industry that some experts have called the “gasoline of the future”. Chile’s Atacama Desert salt flats produced over 12,000 tons in 2016 alone — second behind only Australia.
Argentina managed to gain some ground on Chilean production in 2017, which suffered from a series of legal disputes involving one of its largest mining companies, Sociedad Química y Minera. But Argentina continues to struggle to escape its history of bad credit and decades of economic policymaking that obstructed, strangled, and ultimately discouraged foreign investment.
In that time, interest in Lithium has been growing in response to the demand for long-lasting batteries, especially in the automotive industry. Countries like England and France have announced their plan to prohibit gas-fueled cars by as soon as 2040, and many other countries are expected to follow suit. In response, automakers are ramping up their production of electric cars, which rely on lithium batteries.
When Mauricio Macri became President of Argentina in 2015, he wasted no time in opening up the mining industry, stripping numerous regulations within his first few months in office and removing a five-percent tax on exported minerals — lithium included.
Since then, the price of lithium has tripled.
Last year, President Macri witnessed some of the first tangible effects of his policies when Argentina surpassed China as the world’s third-largest producer of lithium for the first time.
“We need to grow, not two, three, four, but 20 years in a row”, President Macri said during a trip to Catamarca this January, where he spoke about Lithium’s recent success.
And while growth is giving economists in the country hope for an economic rebound, there are still only two companies extracting lithium in Argentina’s portion of the “Lithium Triangle.”
In the meantime, the country is hoping to bolster research of lithium, which officials said should result in an increased interest in the lithium industry. The University of Buenos Aires refurbished a steel plant in late 2017 and turned it into a research center that should help prepare the country for an industry boom continuing through 2018.
The country currently lacks technical specialists in lithium and reportedly struggles to find the needed manpower to maintain ever-growing operations in the Salta and Jujuy Provinces, which are often rural or unpopulated.
"Mining managed in this way, without corruption, with state control that takes care of the environment”, President Macri said. “That is an absolute commitment we all have to make”.
Latin American Post | Max Radwin
Copy edited by Susana Cicchetto