Argentina wants to stimulate mining even as its new president, Alberto Fernández, withdraws market-oriented reforms put his place by his predecessor and prepares to renegotiate tens of billions of dollars of sovereign debt.
Fernández, who took office last month, is on record as saying he needs dollars from exports in order to grow the economy and meet bond payments. So far, he has pinned his hopes on the agricultural and energy sectors. Now, mining and Argentina's nascent lithium industries are making their presence felt.
Alberto Hensel, Argentina's mining secretary, said at an event in Washington this week that the sectors faced challenges but they would be overcome.
He previously oversaw mining policy for San Juan Province, home to the large Veladero mine owned by Barrick Gold Corp and Shandong Gold Mining Co.
The government is determined to boost lithium and copper production at a time when Argentina needs to boost exports more than ever, Hensel declared.
For officials, attracting more investment into the lithium industry will be challenging. Prices of the metal, most commonly used in rechargeable batteries, have fallen dramatically from record levels in mid-2018, after a wave of new products entered the market and global sales of electrified vehicles cooled.
While Argentina has the third-largest recoverable lithium reserves in the world, only two companies are mining in the South American nation's Andean salt-flats. A third project is a year away from kicking in.
Hensel said that if operations at the salt-plains go well, Argentina's lithium carbonate production could rise to 139,000 metric tons a year. Currently, annual production is closer to 30,000 tons.
The secretary's comments come days after Guillermo Nielsen, the president of state energy company YPF SA and close advisor to the president, stated the mining sector is a possibility the government wants to explore. Fernández met with mining companies during his presidential campaign last year.
In a clear gesture to oil and mining investors, the president has said he will mitigate increases in export taxes for those industries. For their part, farmers – whom governments have traditionally used to boost tax revenues – will face further increases.