Argentina’s mining chamber (CAEM) has voiced its approval for President Javier Milei’s plans to implement extensive economic reforms in the country.
The organization is the primary representative for the state’s mining sector and its various operators producing different commodities. These include copper, gold, silver, iron and lithium.
“Defining a basic agreement is essential for all productive activities, given that growth requires certainty in legal, fiscal, tax and economic issues,” the mining organization said Monday, “such as those mentioned in the main points of the proposed agreement [‘Pacto de Mayo’].”
Milei described the current system of distributing tax funds between the federal government and the country’s provinces as “extortionate.” He aims to formalize his vast overhaul of government regulations on May 25 when the pact is set to be signed into law.
Thus far, he has received support from 12 governors in a nation with 23 provinces. The country’s economy has been in dire straits for quite some time and Milei aims to take swift action to mend the situation. He wants to transfer control of state-run industries to the private sector and eliminate government jobs he sees as being no longer essential, among other things.
Fifty five per cent of citizens support his plan, Escenarios survey finds
However, many have criticized his recent actions, even labeling him as a traitor. Thousands took to the streets in late January, concerned about the rising cost of living since he took office. By devaluing the Argentine peso by 54 per cent after coming into power in December, the cost of various goods within the nation has ascended even higher.
Argentina ended 2023 with the highest rate of annual inflation in Latin America at over 211 per cent. The country’s poverty rate is pushing 60 per cent.
Milei of course claims that his changes will be beneficial in the long term. “If we don’t change the economic model from the very roots, then Argentina has no future,” he said.
“We trust that it is a first step that revalues the commitment to building an Argentina that advances with employment, growth, vision of the future and opportunities for progress for its people,” CAEM said lastly in its statement.
The president invited governors and lawmakers to sign a 10-point ‘May 25th pact,’ or 'Pacto de Mayo' in Spanish 👇 pic.twitter.com/MJntPGIpfC
— Buenos Aires Herald (@BAHeraldcom) March 2, 2024
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Argentina’s lithium industry flourishes despite economic troubles
Milei’s government recently secured a major investment in Argentina’s lithium industry from the private Israeli company XtraLit. United States Secretary of State Antony Blinken recently visited Argentina to discuss mining opportunities in the country and global concerns with Milei as well.
The battery metal’s price has dropped by about 80 per cent over the past year. This has prompted some investors to consider allocating their funds into lithium stocks now to see a strong return on their investment in the coming years. Some analysts have predicted that the country’s annual exports will be worth over US$29 billion more by 2040.
Credit: Asian Metal via Bloomberg
Junior mining companies currently developing the nation’s lithium sector include Argentina Lithium & Energy Corp. (TSX-V: LIT), Canada’s Lithium South Development Corporation (TSX-V: LIS) (OTCQB: LISMF) (Frankfurt: OGPQ) and the Australian miner Galan Lithium Limited (ASX: GLN).
Lithium is the world’s lightest metal. It is utilized in various different chemical forms needed for batteries, refrigeration systems, nuclear industry applications, electronics and more.
Argentina currently extracts about 40 kilo tons of the commodity annually.
Lithium South Development Corporation is a sponsor of Mugglehead news coverage
rowan@mugglehead.com
