Argentina is expected to become the world's third largest lithium producer within a few years
2023/8/25
At present, Argentina is the fourth largest producer of lithium carbonate in the world, with three commercially operational projects: the Olaros Salt Marsh project developed by Australian company Alcom in the province of Jujuy, the Fenix project developed by American company Livant in the province of Catamarca, and the Olaros Cocchary project developed by Exxor in the province of Jujuy.
Considering the global energy transformation process and the increasing demand for inputs needed to advance this process, Argentina has a great opportunity to occupy an increasing share of global mineral supply, especially as a supplier of lithium (a raw material used in the production of electric vehicle power batteries).
This opportunity is reflected in the eight state-of-the-art projects under construction. The funds for these projects mainly come from companies in the United States, China, South Korea, France, and Australia.
The spot market price of lithium carbonate has skyrocketed from $8000 per ton in 2020 to a record high of over $80000 per ton in mid-2022. At present, prices have fallen by more than 60% from historical highs, averaging around $30000 per ton.
The Argentine Ministry of Mines and the Argentine Association of Mining Entrepreneurs have stated that in the next few years, the total investment in 35 lithium resource development projects in the country will be between 6 billion and 7 billion US dollars.
With the production of the three lithium resource development projects mentioned above, Argentina's annual production of lithium carbonate has reached 77500 tons, of which more than 40% is exported to China, about 30% is exported to Japan, and about 10% is exported to South Korea.
Meanwhile, according to official forecasts, Argentina's annual production of lithium carbonate will significantly increase in the next three years.
Based on the production capacity arrangement plan of the ongoing construction or expansion projects and their holding companies, it is estimated that by the end of 2023, Argentina's annual production of lithium carbonate will reach 137500 tons.
At that time, the new production capacity after the expansion of the Olaros salt marsh project will be counted. The investment in the second phase of the project is approximately 330 million US dollars, which will increase its annual production from 20000 tons to 50000 tons.
The first phase of the Debida Salt Marsh project located in Katamaka Province is also about to be put into operation. Arkham Company has built a new lithium extraction and refining plant there, with an initial annual output of approximately 25000 tons.
According to official estimates from Argentina, the country's annual production of lithium carbonate will maintain growth momentum in 2024 and reach 229500 tons by 2025.
It is expected that the first expansion of the Phoenix project will have an effect starting next year, with its annual production increasing from 20000 tons to 40000 to 60000 tons by 2025. The investment amount for this expansion is approximately 640 million US dollars.
The Sentneriu Latones project located in Salta Province is expected to start production in early 2024. The construction work of this project is undertaken by the French company Hermann, with an investment of approximately 600 million US dollars. The annual production of lithium carbonate is expected to be 24000 tons.
The Umbrem Elto salt marsh project developed by POSCO in Salta Province, South Korea should also be able to be put into operation in 2024 or 2025, with an annual production capacity of approximately 25000 tons.
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