Argentina Has The Most Potential To Replace Chile As The Next Center Of Lithium Mining Boom

In recent years, investors and operators from around the world have rushed to participate in lithium mining projects in Argentina. Some opinions are beginning to believe that by 2030, Argentina is expected to catch up with or even surpass neighboring Chile to become the largest lithium metal producer in Latin America.

According to the International Energy Agency, Latin America currently accounts for about 35% of the world's lithium supply, with Chile ranking first with 26% and Argentina ranking second with 6%. The region is also estimated to hold more than half of the world's lithium reserves (52%), with Argentina (21%) significantly surpassing Chile (11%) in this regard.

At present, Argentina is the fourth largest producer of lithium carbonate in the world, with three projects that have been put into commercial operation: the Olaros Salar Project developed by the Australian Alcam Company in Jujuy Province, and the American Livent Company in the Caribbean. Fenix project in Tamaca province, and Oraros-Cauchari project in Jujuy province by Exa.

As the above three lithium resource development projects have been put into operation, Argentina's annual lithium carbonate production has reached 77,500 mt. Officials also predict that the country's annual lithium carbonate production will grow significantly over the next three years.

Mariano Machado, chief analyst for the Americas at global risk intelligence company Verisk Maplecroft, told the media when talking about Argentina's lithium industry, "We are talking about a new Chile, and even beyond Chile. The key factor is just a matter of time."

According to data from Argentina’s Mining Secretariat, as of February this year, Argentina’s lithium industry employed 3,788 people, an increase of 59% over the previous year, and 1,406 new jobs. “We’re seeing investors and operators from all walks of life pouring into the country, you name it — it’s very interesting,” Machado said.

Political factors affect lithium supply pattern

However, analysts at Eurasia Group pointed out that the process of Argentina's lithium production may not be smooth sailing, and "risks on the trajectory are high, including the upcoming presidential election and how the results will affect the country's economy." In addition, the government may also introduce relevant intervention measures. "

In April this year, Chilean President Gabriel Boric proposed the establishment of a national lithium company. “All domestic or foreign private companies that want to participate in Chile’s lithium industry must cooperate with the national lithium company. .” This move has been interpreted as the "nationalization" of Chile's lithium industry.

Previously in Latin America, everyone thought of Chile when mentioning mining and lithium, Machado said. But as Chile's lithium industry dimmed after the government wanted to get involved in the industry, Argentina became more popular.

But for Argentina, political factors pose potential risks to the lithium industry. The primary results of Argentina's national election held in August showed that Milley, the presidential candidate recommended by the right-wing "Freedom Forward Party" and the current congressman, unexpectedly ranked first.

Analysts said Milley's unpredictability makes it difficult for outsiders to speculate on how he will "shock the system" once he takes office and how he will regulate the lithium industry.

Analysts at Eurasia Group added: “If Argentina’s lithium boom is ultimately curbed, it will hamper vital supplies needed for the electric vehicle revolution phase. Particularly later in the decade, lithium supply and demand fundamentals are expected to tighten. "