Inspenet, August 22, 2023.
Argentina is on track to become the world’s third largest lithium producer in a short period, driven by global demand and the progress of projects under development. By 2026, current production is expected to triple, reaching 260,000 tons of lithium carbonate .
Currently, Argentina ranks fourth in the world production of lithium carbonate, with three projects in commercial operation: the Salar de Olaroz in Jujuy, operated by the Australian company Allkem; Fénix in Catamarca, owned by the American company Livent and Olaroz Cauchari, also in the province of Jujuy, which belongs to Exar and started operating two months ago.
In view of the global energy transition and the increase in demand for essential materials to drive it, Argentina is in an advantageous position to increase its participation in the world market for minerals. It stands out as a potential supplier of lithium for electric vehicle batteries.
This trend is reflected in the eight most advanced projects that are under construction, with major investments coming from leading companies from the United States, China, South Korea, France and Australia.
The value of lithium has experienced significant variations and notable volatility in the last two years. Starting from a spot market price of $8,000 in 2020, it hit a record of over $80,000 by mid-2022. However, currently it has experienced a drop of more than 60%, standing at an average close to $30,000.
In this way, the estimates are based on the production volumes that Argentina is positioned to generate in the coming years, considering the set of projects that cover both the expansion of already active operations, as well as those in the construction process and those that are in progress. an advanced stage of development.
Committed investments for a total of 35 registered projects vary in the coming years and are in a range of between $6,000 and $7,000 million. These data are provided by the Ministry of Mining and the Argentine Chamber of Mining Entrepreneurs.
Lithium extraction projects in Argentina
With three lithium extraction projects in operation (Mina Fénix, Salar Olaroz and Cauchari-Olaroz), the installed production capacity amounts to 77,500 tons of lithium carbonate equivalent (LCE) per year. Approximately a little more than 40% is exported to China, 30% to Japan and around 10% to Korea. These Asian countries together account for 85% of global demand .
However, according to government forecasts based on reports from operating companies in the provinces of Catamarca, Salta and Jujuy, Argentina could significantly increase its lithium carbonate production in the next three years.
Thanks to the projects under construction and expansion and in accordance with the schedule established by the controlling companies, lithium production capacity is expected to triple by December of this year, reaching 137,500 tons of LCE per year by the end of 2023.
The reason is that by that date the new production capacity derived from the expansion of Salar Olaroz would be added, which with an investment of 330 million dollars in this second phase, will increase production from 20,000 to 50,000 tons of equivalent lithium carbonate. (CLE).
The start of the Tres Quebradas project in Catamarca is also contemplated, promoted by the Chinese mining company Zijin Mining Group, which plans to develop the salt flat of the same name with an investment of 370 million dollars and gradual production projections that would go from 20,000 to 40,000 annual tons.
In addition, the commissioning of the first phase of Sal de Vida, also located in Catamarca, is planned, where the Allkem company has established its new plant for the extraction and refining of lithium, with an initial production of 25,000 tons of lithium.
According to official estimates, the total capacity of the domestic market would experience another increase in 2024 and reach 229,500 tons of lithium carbonate equivalent per year by 2025.