Despite a sharp decline in the price of lithium, its demand will grow in the coming years, particularly in Argentina. The country’s lithium exports totalled about US$696 million in 2022 and could be worth around US$30 billion per year by 2040.
That is according to an article published by Bloomberg Línea on Tuesday. The Panama-based arm of the renowned media company references a recent report it obtained from Argentina’s business and consulting firm Aleph Energy for its findings.
“The potential of Argentina with lithium is immense and the growth is going to be very significant,” Aleph’s Managing Director Daniel Dreizzen said. Aleph says there are 64 lithium projects in the country, including three that have entered the production phase. Seven more are under construction, while the others are in the identification phase, according to the report.
Analysts have predicted that the value of annual lithium exports from Argentina could shoot up to US$5.6 billion by the end of next year. Aleph estimates that the total could rise to US$8 billion by 2028. Meanwhile, the country’s mining secretariat expects US$8.7 billion by the latter date.
Those numbers are notable considering that Argentina’s entire mining sector is estimated to have only generated about US$4.4 billion last year. This is up from US$3.8 billion in 2022. The year-over-year increase is primarily attributable to a major lithium project jointly operated by China’s Ganfeng Lithium (SHE: 002460) and Lithium Americas (Argentina) Corp. (TSX: LAAC) (NYSE: LAAC).
The nation could potentially produce 1.5 million metric tons of lithium carbonate equivalent each year by 2040. Argentina supplies about 6 per cent of the world’s lithium and may even surpass Chile by the end of the decade. Chile generates 26 per cent.
Argentina holds about 20 per cent of the world’s lithium resources.
Companies investing in Argentina’s lithium industry. Image credit: Aleph Energy
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Lithium to rise again in 2028, report says
Despite lithium’s sharp decline, Aleph has predicted that its value will start to ascend again in four years.
However, Dreizzen says the country’s lithium industry still encounters some issues. These include a lack of suppliers and insufficient transport in northern Argentina.
“Restrictions on accessing foreign exchange from exports also slow down development,” Dreizzen said.
Most companies in the country rely on evaporation ponds while others are experimenting with different methods of direct lithium extraction. Lithium brine extraction is less expensive than hard rock lithium mining in other parts of the world like Africa, Australia or Brazil.
“The benefit is that salt flats don’t require spending as much energy because evaporation does a large part of the work and then it’s easier to separate it compared to when it’s a rock,” Aleph said in the report. “This allows for low-cost and highly competitive lithium carbonate production.”
Lithium carbonate is now worth about 75 per cent less than it was at the end of 2022 at US$20,000 per ton.
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High-grade lithium brine in Argentina
Fifty-eight per cent of the world’s lithium is contained in brine resources. Argentina’s lithium brine is primarily concentrated in the Catamarca, Jujuy and Salta provinces. Their brine yields a very high level of purity.
India’s mining company KABIL (Khanij Bidesh India Ltd) just invested over US$25 million in a series of claim blocks in the Catamarca province.
The newly established lithium giant Arcadium Lithium plc (NYSE: ALTM) (ASX: LTM) currently runs the Cauchari and Olaroz projects in the Jujuy province. That major company produces 13 per cent of the world’s lithium.
Meanwhile, the emerging industry player Lithium South Development Corporation (TSX-V: LIS) (OTCQB: LISMF) (Frankfurt: OGPQ) is currently developing a major resource at its Hombre Muerto North project in the Salta province.
Other major influences in the country’s sector include South Korea’s POSCO Holdings (KRX: 005490), North Carolina’s Albemarle Corporation (NYSE: ALB) and the French miner Eramet S.A. (EPA: ERA).
Lithium South Development Corporation is a sponsor of Mugglehead news coverage
rowan@mugglehead.com
