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ARGENTINA IS ABOUT TO UNLEASH A WAVE OF LITHIUM IN A GLOBAL GLUT

Bloomberg News | June 28, 2024 | 2:54 pm Battery Metals Latin America Lithium 
Lithium mine on the Salinas Grandes salt flat Jujuy province, Argentina. (Image
by Earthwork, Flickr.)

For all the money that’s poured into Argentina’s giant lithium deposits, the
country has seen just one new mine come on stream in almost a decade. That’s
about to change.



Four new projects will finally begin to churn out lithium in the weeks and
months ahead, according to a yet-to-be released federal government time-line
seen by Bloomberg News. That will almost double production capacity in
Argentina, whose growth potential has long lured the attention of battery makers
around the world.


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> Lithium boom in Argentina hinges on politics, Zijin unit says

The projects — built on salt lakes nestled in the Andes mountains in South
America’s so-called lithium triangle — are a boon for new President Javier
Milei, who desperately needs more export dollars to lift currency controls that
are stifling Argentina’s crisis-prone economy.

Yet for global lithium markets, the extra production comes at a time when buyers
are already well supplied, with inventories piling up amid the gloomy outlook
for electric vehicle demand. Spot prices of lithium carbonate in China have slid
to the lowest since August 2021.

Despite a flurry of prospecting and development, only three operations in
Argentina currently export lithium. That’s still enough to have established the
country as a major producer behind Australia, neighboring Chile and China. Of
the three, only one is a newcomer — Minera Exar, which is majority owned by
Ganfeng Lithium Group Co.

Now, Argentina is taking a genuine leap, with four new projects ready to begin
full-scale operations and ramp up annual capacity by 79% to the equivalent of
202,000 metric tons, according to a Bloomberg breakdown of the unreleased
government data.

The first of the new projects will be Eramet SA and Tsingshan Holding Group
Co.’s Centenario Ratones, which is scheduled to hold an inauguration event next
week, a Mining Department spokesperson confirmed. The others are: Posco Holdings
Inc.’s Sal de Oro; Zijin Mining Group Co.’s Tres Quebradas; and Ganfeng’s
Mariana.

While the new capacity won’t all be used straight away, it nevertheless
represents a significant overhang in a market in which global production is
estimated by Bloomberg Intelligence to total 1.4 million tons this year.

> Rio Tinto to invest $350 million in Argentina lithium project

Rio Tinto Group is also aiming to have a 3,000-ton starter plant ready by the
end of the year at its Salar del Rincon project, according to a presentation
delivered by Santiago Cicchetti, Rio Tinto’s external affairs manager in
Argentina, at a conference in Buenos Aires this week.

The June 26-27 conference was a hive of activity attended by top producers,
prospectors, technology providers and provinces that have a big say over if and
how natural resources in their territory get unearthed.

So far in Argentina, the lithium industry has centered on the provinces of
Jujuy, Salta and Catamarca. But La Rioja, just to the south, is now making a
push to tempt prospectors, Walter Gomez, president of provincial mining outfit
Emse, said in an interview. La Rioja passed a controversial law last year
allowing it to rescind mining acreage from any owners it deems to be land
speculators uninterested in exploration.

The conference took place against the backdrop of much-awaited federal approval
for Milei’s sweeping reforms, including a program of tax, currency and customs
benefits for industrial investments that will benefit lithium developers.

(By Jonathan Gilbert and James Attwood)



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