TELF AG analyzes Argentina’s rise in the global lithium industry
Key drivers of growth
Over the past few years, thanks to the breadth and clear utility of its industrial applications, lithium has gradually established itself as one of the most valuable and strategic resources for the evolution of humanity, also standing out for its ability to promote the energy transition indirectly. The growing demand for this material has also recently favored the emergence of new international players, who have quickly established themselves among the leading global producers of this precious resource. One of these is Argentina, currently the world’s fourth largest producer of lithium, whose role in this sector is evolving very rapidly, leaving us to foresee that Buenos Aires could play a central role in this specific sector.
Only three nations produce more lithium than Argentina at the moment: Australia, Chile, and China. However, the production levels recorded in the last two or three years are very eloquent and suggest that the growth of the lithium sector in Argentina is destined to grow further. Compared to 2022, Argentina’s lithium carbonate production has gone from 34,000 tons to about 124,000 tons today, tripling the quantities produced in just two years.
One of the reasons that have pushed Argentina so high in lithium production is undoubtedly the strength of its planning and a certain level of strategic planning. The tripling of production capacity is due to the number of production projects currently under development in the country, which continue to be much more numerous than a few years ago. One of these, recently inaugurated, is the Centenario Ratones plant located in the northern province of Salta, which seems destined to contribute greatly to Argentina’s future fortunes in the lithium sector.
A clear strategic vision
In addition to targeted strategic planning, started especially in 2022 in the face of rising prices, Argentina’s growth in the sector also has to do with a mix of external and domestic factors: the increase in global demand for lithium is one of these, to which must be added the growing strategic importance of the “lithium triangle” – a lithium-rich area between Argentina, Chile and Bolivia – and the large amount of experience accumulated by Argentina in managing previous projects, which has allowed it to arrive well prepared in this particular historical juncture.
Another factor that is contributing to the growth of the Argentine lithium industry has to do with the quality of the final product: Argentine projects are, in fact, able to ensure lithium hydroxide and lithium carbonate, which appear to represent valid alternatives to hard spodumene rocks (i.e., the mineral from which lithium can be sourced). Furthermore, thanks to the collaboration of some foreign companies, Argentina is experimenting with highly innovative sourcing methods, such as the one based on direct sourcing. This new technique is attracting more and more attention from the major players in the sector.
In this particular situation, moreover, the vitality of the national sector linked to strategic minerals has been indirectly favored by political initiatives, which since December of last year, have given a boost to the Argentine economy (with evident effects in the decline of the fiscal deficit and inflation), also facilitating the strategic minerals sector with a series of tax advantages.
