Lithium, the white hope of Argentine mining

In the context of a mining industry with modest productive performance and poor image, lithium stands out as the great non-metallic promise and, if all the projects in dance are materialized, Argentina will increase its current production capacity ten times in 2024 and will have definitively consecrated as the first global producer. One of the keys to this promised prosperity is the strong profitability of the ventures, which require a tenth of the investment and a faster recovery than others, such as gold and silver.

That projection corresponds to the Chamber of Mining Entrepreneurs (CAEM), which today does not waste optimism. The sector was favored by the controverted decision in the dawn of the macrista administration to remove the retentions, later partially restored to alleviate the fiscal straits.

The industry today regrets the lack of firm rules that continue to suspend long-conceived ventures that could catapult the current US exports from the current US $ 4,000 to US $ 10,000 million.

“Argentina does not have a mining development plan and it is not a country eligible to invest” by foreign investors, Roberto Cacciola, from Minera Santa Cruz. “Institutionality is key for the long term,” warns the Economist, Gustavo Bosch, executive director of that entity.

However, exploration in different metals has been growing in the last two years, slowly but steadily. Perhaps because in this segment the costs are low, while the exploitation costs are relatively high. In order to contain them, the companies worked on a “competitiveness agreement” that tries to reformulate the wage regime, extending the working day and reducing the rest time. But they did not find political conditions to formalize it yet.

A fact that the entity provides publicly illustrates the picture: Chile exports mining products for 40 billion dollars a year, ten times more than Argentina. A gap that is not explained by geological but strategic political reasons.

In this horizon there is a shining star that belongs to 20% of the local mining activity, the non-metallic one. Argentina integrates with the Trans-Andean country and Bolivia the triangle of lithium for the wealth of its salt flats and today has the third proven reserve in the world. As a brooch, local lithium has less impurities than Chile and is open to private activity, which in some way facilitated exploration: since 2015 the exploratory budget has increased by 928%.

Unlike metals, it is not a commodity. There is no fixed world price, since this arises from particular transactions subject to large fluctuations. Last year, China came up with stock and then suspended operations: the product skidded 40% from a peak of just over US $ 12 thousand per ton.

That uncertainty, however, does not make a dent in what seems like a good business. The average export price last year was around US $ 9,000 per tonne of lithium carbonate and, according to informal estimates by industry entrepreneurs, the total costs hardly exceed US $ 6,500.

While a large metal project requires an investment of around US $ 3,000 million to develop, one lithium can be solved with US $ 400 million. It is not a strictly extractive activity but an industrial process driven by a demand that promises to grow geometrically in the world, basically in the hands of electric cars.

According to estimates managed by that employer, the sale of cars with this combustion grows at a rate of 12.6% per year and each car requires at least 1.6 kilos of lithium, against the 18 grams that a tablet demands. The new mobility is the great bet to produce a material that abounds in the northern provinces.

Today there are only two projects consolidated and in production. The Salar de Hombre Muerto in Catamarca, exploited by Minera del Altiplano (FMC Lithium Corporation) and Jujeño de Olaroz, operated by the Toyo Sucho and Orocobre company. Caucharí will begin to produce in the coming months and there are 9 of the 23 exploratory projects in an advanced situation, which shape concrete opportunities. Among them the Catamarca Tres Q, Liex S.A, subsidiary of the Canadian Neolithium. He already enlisted the pilot plant and now he needs to spend $ 395 million to develop it. “The problem is financing and the resolution of the electoral calendar,” says his spokesman, the geologist Roberto Lencina.