Huanshi Finance
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According to Bloomberg, four lithium projects will be put into production in Argentina in the coming period. The first batch of new projects will be Centenario Ratones, a joint venture between France's Eramet SA and Tsingshan Holdings, as well as Sal de Oro of POSCO, Tres Quebradas of Zijin Mining Group and Mariana of Ganfeng, a spokesman for Argentina's Ministry of Mines confirmed. With these projects fully operational, Argentina's annual production capacity will increase by 79% to 202,000 tonnes, further cementing its position as the world's leading lithium producer.
Argentina is rich in lithium resources. (AFP)
These projects are concentrated in the northwestern provinces of Jujuy, Salta and Catamarca, which are located at the junction of Argentina, Chile and Bolivia, and are known as the "lithium triangle" of South America. In the past few years, Argentina has been a major producer after Australia, Chile and China, but only three companies have exported lithium, and only one new mine has come on stream in a decade.
Argentina has long been plagued by economic problems, and the government has been pinning its hopes on the development and export of lithium resources to boost the country's economy. During the previous administration, Argentina has cooperated with multinational mining companies to carry out a series of exploration and development in the area, and invested a lot of money in Argentina's lithium mines, but under the influence of various factors, it has achieved little success.
After the new president, Milley, came to power, vigorously pursued "anarcho-capitalism", and more than 30 global mining groups flocked to it. Against the backdrop of its ongoing setbacks in economic reforms, there is an urgent need for more export earnings. For Milley, the new projects, located on salt lakes in the Andes Mountains in South America's "lithium triangle," could help boost Argentina's economy and achieve its reform goals, and he announced that he would further cut the cost of foreign exchange for mining companies.
Local officials believe that lithium mining can bring in more tax revenue, which is the key to getting out of the economic crisis, with data showing that Argentina's cumulative inflation rate was 65% in the first four months of this year, compared with 289.4% in the past 12 months. The International Monetary Fund expects Argentina's GDP to shrink by 2.8% in 2024.
The growth potential of Argentine lithium mines has been attracting the attention of global battery manufacturers, analysts said. Compared to neighbors Chile and Bolivia, which are also rich in lithium resources, Argentina's lithium mining industry is more relaxed, with lower taxes and a more open market. In addition to the provinces of Jujuy, Salta and Catamarca, other provinces are currently trying to attract investors.
On June 28, Milley's proposed Basic Law was passed in the Chamber of Deputies of the Argentine Congress, which the Argentine Chamber of Commerce and Services considered to be a "signal of confidence" to domestic and foreign investors, arguing that it would promote the implementation of a preferential tax, monetary and tariff program for industrial investment, which will benefit lithium developers.
However, Bloomberg reports that although the new capacity will not be fully operational immediately, it is still a significant overcapacity for a market that will have a total global output of 1.4 million tonnes this year. There are also comments that the increasing inventory in the current situation of sufficient supply has increased the downward pressure on lithium prices, and mining companies need to face the challenge of balancing supply and demand.
Source | Global Times
Audit | Yang Shasha
Edit | Wang Dong
Proofreading | Cui Jinyue