Lithium projects seek financing as production seen tripling
Mining companies focus on Argentina as it is set to become second producer in the world
Argentina’s lithium carbonate production will triple by 2019, and could grow by even more if companies find financing for various projects they are prepared to launch, industry executives and a government official told Reuters.
Demand for lithium — a crucial material in electric car batteries and mobile phones — is soaring worldwide, prompting miners to lock up new sources of supply. Argentina is already the world’s third-largest producer, and forms part of the so-called lithium triangle with Bolivia and Chile that accounts for half the world’s reserves.
President Mauricio Macri has implemented a number of pro-market reforms in Latin America’s third-largest economy since taking office in December 2015, making Argentina a natural choice for miners looking to boost output.
“Certainly, the world is focusing on Argentina,” said John Kanellistas, president of Canadian miner Lithium Americas, which last month partnered with China’s Ganfeng Lithium to build a 25,000 tonne-per-year processing plant to open by mid-2019 that would handle 85 percent of Argentina’s current output of 29,000 tonnes per year. The country represents 15 percent of total world production of 200,000 tonnes. Global output is expected to reach 400,000-500,000 tonnes by 2025, spurred by the growth of electric cars.
Australian miner Orocobre plans to boost output at its Salar de Olaroz facility to 35,000 tonnes in 2018, double the 17,500 tonnes it expects to produce this year, a company spokesman said.
There are currently more than 30 proposals to develop lithium reserves, and three companies are actively seeking funding to build plants, said Mario Capello, under secretary for mining development in the Energy and Mining Ministry.
That includes Galaxy Resources’ 25,000tonne facility, a 20,000-tonne project by French miner Eramet, and a 50,000-tonne joint venture from Canada’s Enirgi Group Corporation and Australia’s ADY Resources
Macri has highlighted the country’s lithium reserves as an opportunity to attract foreign investment and boost the sluggish economy. He has removed the previous centre-left administration’s mineral export duties and overturned a ban on companies shifting profits overseas.
“Without a doubt, the president’s measures have brought back competition, predictability, and clear rules of the game to the mining sector, which has resulted in a lot of interest in lithium in particular,” Capello said.
Argentina is also looking to promote domestic manufacturing of lithium batteries, and last year Italian battery manufacturer FIB-FAAM reached a deal to build a lithium cell and battery plant with Y-Tec, a technology company controlled by state-owned oil company YPF.
Herald with Reuters