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.
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, neighbouring Chile and China. Of the three, only one is a newcomer — Minera Exar, which is majority owned by Ganfeng Lithium Group Co.
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 Group is also aiming to have a 3,000-ton starter plant ready by the end of the year at its Salar del Rincón 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 centred on the provinces of Jujuy, Salta and Catamarca. But La Rioja, just to the south, is now making a push to tempt prospectors, Walter Gómez, 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 programme of tax, currency and customs benefits for industrial investments that will benefit lithium developers.
In the context of Argentine President Alberto Fernández''s visit to the Y-TEC (YPF-Tecnología) facilities in the Berisso district of Buenos Aires, Y-TEC President and former Minister of Science, Technology and Innovation, Roberto Salvarezza, assured that they are "making rapid progress with the industrial plant". In this sense, he remarked that "the civil works of the industrial plant are finished". Furthermore, the former Minister ensured that "in October the equipment will be arriving, and in December the industrial production of these cells for lithium batteries will be ready".
When asked about the current lithium production process in Argentina, Salvarezza commented: "for years, at Y-TEC we have had a pilot plant that is working and producing cells with materials that are generated in our country, lithium carbonate, with carbon that can be used from sources obtained in the country". He also added that, to this end, "we are supplying ourselves with lithium carbonate to manufacture the cells for next year from companies that are extracting lithium carbonate and exporting it".
When asked about YPF''s involvement in lithium, Salvarezza also stated that "YPF extracts gas and oil, but also produces, processes and industrialises lubricants, naphtha and fuels in our country", and "we are thinking of doing the same for lithium"; "YPF will be in the salt flats extracting brine, but at the same time processing it to produce lithium carbonate".
Once these cells have been produced, the final production of the batteries will be carried out by different SME companies that have already been identified by Y-TEC, which will receive the final product for its commercialization.
As far as commercialisation is concerned, in a first stage there will be pilot projects to test the batteries, for stationary use and energy storage in small solar parks. One of these is Isla Paulino, in the town of Berisso, where the electricity will be generated by a solar park in addition to the lithium batteries. Then it will be tested in mobility applications, and will also be supplied to the army for mobile radars, thus displacing lead-acid batteries.
Argentina has the second largest lithium reserves in the world and is the world''s fourth largest lithium producer. However, although there are numerous projects under development, there are currently only two projects in production: Livent (Catamarca), and Sales de Jujuy (Jujuy).
This plant has an annual production capacity of 13MWh, which is equivalent to 1000 batteries for stationary storage of renewable energies, or about 50 for electric collectives, and will create 50 direct jobs.
The plant''s civil works, machinery and the production of electrode materials required investments of USD $770 million, of which the Ministry of Science and Technology contributed USD $210 million, while the University of La Plata and Y-TEC invested USD $280 million each.
One of the criticisms, or observations that the project received, is whether production will not represent a high cost due to the elements that must be imported, since lithium is only one of the components of these cells.
In this regard, Salvarezza explained that "we have chosen a technology that was developed a year ago, which is lithium iron phosphate, made up of non-polluting elements and with components that are accessible in the country". As Salvarezza explained, "the iron is available in the country, the phosphate can be imported without difficulty from neighbouring countries such as Brazil, the electrolyte will also have to be imported because it is difficult to produce in Argentina, and the graphite, which is very accessible, comes from coke in YPF distilleries".
When asked about the profitability of the YPF project, Salvarezza announced that "it can be in some niches a profitable resource. Electromobility is a future that is coming". He also added that "it is a purely risky venture, but we have to make inroads and position ourselves in this niche. The interesting thing about Y-TEC''s initiative is that it will then stimulate other companies to manufacture the batteries".
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