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Updated Jul 8, 2024, 12:22pm EDT
South America
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Semafor Signals

Argentina to boost lithium supply as Latin America makes green transition

Insights from Bloomberg, Americas Quarterly, El País, and Forbes

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Javier Milei
Liesa Johannssen/Reuters
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Argentina will dramatically expand its supply of lithium, a mineral key to the global green energy transition. Lithium is a key component in batteries, and Latin America is already one of the world’s leading producers of the element, second only to Australia.

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The country will open four new lithium mines in the coming months, Bloomberg reported, increasing its annual capacity by around 80% and helping it catch up to neighboring Chile, which is currently the dominant regional producer.

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SIGNALS

Semafor Signals: Global insights on today's biggest stories.

Latin America’s role in the global green transition is growing

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Sources:  
Semafor, Americas Quarterly, El País, Chatham House

Argentina is among three Latin American countries — the others being Bolivia and Chile — that make up a “lithium triangle,” where almost 60% of the world’s deposits of the mineral exist, Semafor’s Jeronimo Gonzalez previously reported. With the exception of Chile, the region has been underdeveloped. But investment has been growing, largely led by China, Americas Quarterly wrote. The US is also starting to invest more, but may be lagging Beijing by as much as 10 years, an expert told El País. Ultimately, foreign countries are crucial for extraction, as “technologies for refining and the construction of downstream industries remain in the hands of advanced, rich states and multinational corporations,” think tank Chatham House noted.


Milei’s approach to lithium reflects geopolitical tensions

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Sources:  
Bloomberg, El País

Argentina’s President Javier Milei hopes the new investment in lithium extraction will give a much-needed boost to the country as he tries to extricate it from a decades-long economic crisis, Bloomberg noted. Milei recently passed a package of laws designed to benefit lithium developers and attract more export dollars. Meanwhile, the president has moved Argentina away from its previously close relationship with China and has instead welcomed closer ties with the US. He is also reportedly discussing “investment opportunities” with tech mogul Elon Musk, El País noted. China is not out of the picture altogether, though — Beijing is also continuing to expand its portfolio of lithium projects in the country.

There is no shortage of lithium globally, and its prices have dropped

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Sources:  
Bloomberg, Forbes

Argentina’s move to produce more lithium comes at a time when there is no shortage of the mineral globally, Bloomberg reported. In June, prices for lithium carbonate in China reached their lowest level since 2021, an “epic slump,” the outlet added. Slowing demand for electric vehicles, which use lithium-powered batteries, caused a cut in orders of the mineral, while rising production and expectations of a summer let-up made prices drop. “This price crash should remind everyone that green energy is just as susceptible to market forces as its competitors in the fossil fuels industry,” a political scientist wrote on Forbes.

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