Argentina's export tax could destroy the country's lithium mining projects

SMM, Sept. 6: Argentina has decided to impose a tax on primary lithium exports, which will affect future lithium mining projects. At the same time, the country is stepping up its exploitation of lithium, a mineral resource. The Argentine government said this week that it would impose tariffs on lithium shipped at 3 pesos per dollar by 2020. This is equivalent to a tax of 8 to 10 per cent on lithium sales, while mining companies pay about 3 per cent of royalties to the government, analysts at Credit Suisse (Credit Suisse Group AG) said in a report on Wednesday. Credit Suisse (Credit Suisse) said the tax could delay investment decisions, although it should not affect some existing expansion plans.

"this is a complex issue and we may lower the valuation," MacMurray Whale, an analyst at Cormark Securities, said in an email. "if the tax is not temporary, it will have a significant negative impact on the net asset value of all Argentine mining companies."

In South American countries, companies already face difficulties in increasing production. Quimica y Minera de Chile SA and Albemarle Corp. in Chile It is expanding its capacity in Chile.

Argentina has the world's largest proven lithium reserves, but lags behind Australia and Chile in terms of production, according to the U.S. Geological Survey (U.S. Geological Survey).

In the past few months, established Argentine miners and small companies have begun to build and expand lithium operations in saline-alkali areas.

Whale said companies that will be hit include (Lithium Americas Corp.), an American lithium company that is building a caucharil-olaroz lithium project. And Orocobre Co., Ltd. (Orocobre Ltd.).

(note: if copyright issues are involved, please contact SMM and we will deal with them in a timely manner.)

"Click to view details