Argentina Prepares For Changes To Lithium Laws

On Sunday, October 22, Argentina will vote to elect a new president who, among other things, will have to resolve the pressing issue of the production and export of lithium, a chemical element belonging to the group of alkali metals. In the era of energy transition, decarbonization, and green energy, issues related to the extraction and global trade of lithium, needed to produce lithium-ion batteries, have become the focus of development strategies in many countries around the world.

There are lithium deposits in Asia, Africa, and Russia, but the real treasure trove of this strategic metal is the so-called “lithium triangle” in South America, on the border of Chile, Argentina, and Bolivia, which contains about 67% of the world’s proven reserves of this mineral.

The hunt for lithium has intensified in recent years, with Russia and China announcing in June a $1.4 billion investment in lithium production in Bolivia. In September, the automobile holding Stellantis, created in 2021 as a result of the merger of Fiat Chrysler Automobiles and PSA, invested $90 million in the Argentine company Lithium & Energy to provide lithium supplies in the amount of 15 thousand tons per year.

According to international analysts, the three Latin American countries “manage this precious raw material very differently.” In Bolivia, the country with the world’s richest reserves of lithium, the first of the alkali metals, it is rightfully considered a “strategic resource” and is under very strict control of the Bolivian state. This means that foreign companies interested in launching their own production facilities “must create joint ventures with the Bolivian state.”

Even in Chile, since the time of dictator Augusto Pinochet, lithium has been part of the country’s “strategic” resources, not for the production of lithium-ion batteries that had not yet been invented at that time, but because of its importance in the production of nuclear energy: the lithium-7 isotope is used to inhibit corrosion of structural materials in PWR (pressurized water reactor) nuclear reactor systems.

But in Argentina – and the country’s new president will no longer be able to continue ignoring the existence of this problem – lithium is still considered a “simple raw material” and is exported far and wide by foreign companies that pay only 3% royalties. This situation has sparked strong protests from local indigenous peoples, who have taken to the streets several times during the recent election campaign.