Lithium production in Argentina rose 56.7 percent in July 2024 compared with the same month last year, according to data posted by the INDEC national statistics bureau.
More than 4,991 tonnes of lithium carbonate were produced, according to INDEC’s IPIM (Mining Industrial Production Index) measurement.
In the first seven months of the year, total production increased 62.3 percent compared to the same period of 2023. But while the growth remains considerable, July’s improvement did not match the staggering 128.2 percent year-on–year increase recorded in June.
Despite the growth, industry experts are closely watching the decline of international lithium prices, which currently stand at US$10,483 per tonne of lithium carbonate equivalent (LCE) – well below the US$80,909 seen in November 2022.
The drop in prices can be explained by an excess of supply and lower demand for electric cars on a global scale – one of the main uses of the mineral is for battery production. The elimination of subsidies aiding the purchase of electric cars in China has also contributed to the market contraction.
Faced with the new state of affairs, mining companies have begun to apply cost reduction strategies to maintain the viability of lithium projects.
Argentina’s government, however, remains confident that prospects will improve in the coming years.
A recent report by economist Maximiliano Ramírez, macroeconomic programming undersecretary at the Economy Ministry, observed that the lithium market is small compared with that of other metals, which makes it sensitive to abrupt price variations.
The specialist projects that prices will stabilise and reach an average of US$20.800 per tonne between 2025 and 2027.
President Javier Milei’s government and several foreign mining companies maintain high expectations for the sector. Investment in lithium projects continues in Argentina, most recently with the news that South Korean company Posco will invest US$2 billion in the Hombre Muerto salt flat, located in the northern province of Salta.
French company Eramine Sudamérica, in partnership with Chinese Tsingshan, will soon open the first lithium mine in the Centenario-Ratones salt flat and is planning a second facility with an additional investment of US$800 million.
Chinese company Ganfeng, a leader in battery production, is also sizing up a US$1-billion investment for its Mariana project in the Llullaillaco salt flat.
Cabinet Chief Guillermo Francos said in a recent Congress appearance that the completion of lithium projects will inject around US$47.1 billion into Argentina’s economy over the next few years, consolidating the country’s position as one of the top worldwide lithium producers.
By late 2024, total production of lithium carbonate in Argentina is expected to be in excess of 80,000 tonnes, which would be a significant leap from the 44,000 tonnes produced last year.
– TIMES/NA
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