A provincial court in Argentina’s Catamarca province has decided to put a pause on the issuance of new lithium mining permits over environmental concerns.
The court’s decision, shared with Reuters late last week, was inspired by animosity from the community over the impact of mineral extraction on local waterways.
The local Atacameños Indigenous group filed a lawsuit in 2021 over not receiving consultation prior to the government approving projects. It says the environmental assessments completed for lithium mining sites in the Salar del Hombre Muerto salt flats were inadequate.
The suit alleged that a local river had dried up due to the vast amount of water used by mining companies. Lithium extraction is known for its high rate of water usage, an issue that various companies have been trying to find solutions for.
Authorities in the province are currently completing a report on the lithium mining industry’s environmental impact. Once that has been finalized and assessed, the government will consider issuing new permits again. Four operators are currently at a standstill with their applications as a result.
Lithium permit freeze limited to new projects, says Catamarcahttps://t.co/aV8NAIYZIu
— Buenos Aires Times (@theBAtimes) March 15, 2024
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Majors continue as normal
The court’s ruling will not have any impact on companies already active in the province. Major operators in Catamarca include Arcadium Lithium plc (NYSE: ALTM) and Pohang Iron and Steel Company (POSCO) (KRX: 005490).
“The court ruling does not impact Arcadium Lithium’s existing mining operations and expansion activities at its Fenix and Sal de Vida projects,” Arcadium said in a news release.
South Korea’s POSCO recently entered a partnership with the junior miner Lithium South Development Corporation (TSX-V: LIS) (OTCQB: LISMF) (Frankfurt: OGPQ) in the neighbouring Salta province.
Together, they will develop two of the five claim blocks at Lithium South’s Hombre Muerto North operation.
Despite a sharp decline in the value of lithium and ensuing layoffs and cost-cutting initiatives among operators, Argentina’s battery metal industry continues to appeal to investors throughout the globe.
The nation’s President Javier Milei recently chose to slash costs for mining companies as part of his economic reform.
The United States Geological Survey recently estimated that Argentina holds 22 million tonnes of lithium.
Lithium South Development Corporation is a sponsor of Mugglehead news coverage
rowan@mugglehead.com
