Lithium: exports increased 166% (Government expects it to displace gold)

Scioli held a meeting with Ávila and with two governors from northern Argentina to promote mining potential: Gerardo Morales from Jujuy and Raúl Jalil from Catamarca. “The world demands what our country has, lithium and copper,” Scioli told them, highlighting the “great task of creating conditions” for receiving investments of more than US$4 billion.

Currently there 38 lithium projects in the portfolio in Argentina, from those that are in a state of evaluation to those that are expanding, the majority in Catamarca, Salta and Jujuy, according to CEP XXI. But there are currently two projects in production, both in expansion. Fénix, in Catamarca, owned by the company Livent, and Salar de Olaroz, in Jujuy, owned by Allkem Ltd. With these projects, the Government foresees an exponential increase in production, going from 37,500 tons of lithium per year to more than 200,000 tons. There is also 6 under construction.

Given this scenario, Productive Development ensures that the ore is going through a investment boom, with announcements since the beginning of 2020 that are close to US$4 billion. If all the sector’s announcements materialize, mining exports will double in 5 years, going from US$3,209 million registered in 2021 to US$6,508 million in 2026.

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“Lithium exports would multiply by at least ten times, displacing gold from first place”, they assured in a statement from Productive Development. The expectation is that this will happen in 2025. Currently, they were $50.9 million in May, record for that month, especially to a price effect, given that international values ​​climbed 392% year-on-yearaccording to the CEP XXI, while the amounts fell by 24%.

so far this year, in the accumulated January-May, lithium exports were US $ 199 million, which implied an increase of 166.5% year-on-year. Although lithium is the third largest export mineral, after gold and silver, it is the one that had the largest increase. The Salar Olaroz, in Jujuy, is the one that generated the most export value (75% of the total in the year), and grew 28% year-on-year. The other remaining mine in Catamarca, represents the other 25% of total exports, and grew 23% in the interannual accumulated. In this case, the AFIP is investigating maneuvers of underinvoicing of exports and transfer prices, which could lead to million-dollar fines.

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As for the entire sector, mining exports accumulate exports for US$2,562 million, the highest in the last 9 years, according to CEP XXI. However, where the government knows it can make an exponential difference is in the copper sector. This week, the Canadian multinational Lundin winked at the government by expressing “expectations” for the new mobile withholding regime, which could involve investments of US$4.1 billion.

However, there is another important project that is stuck, as Ámbito learned. The Taca Taca copper project in Salta, owned by the Canadian company First Quantum, could already start construction: they have “every intention” to do so, but first they assure that they need to “solve some problems.” It would be an investment US$3.6 billion, with the possibility of annually exporting US$2 billion in copper. However, the company is analyzing the new withholding regime, fiscal stability and exchange restrictions, given the doubts about whether they will be able to access the dollars to repay the financing.

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