Lithium production in Argentina experienced a remarkable increase of 56.7 percent in July 2024 compared to the same month in the previous year, according to data released by the INDEC national statistics bureau. The July output surpassed 4,991 tons of lithium carbonate, as indicated by INDEC’s Mining Industrial Production Index (IPIM).
Over the first seven months of 2024, total lithium production rose by 62.3 percent compared to the corresponding period in 2023. Despite this substantial growth, the rate of improvement in July did not reach the extraordinary 128.2 percent year-on-year increase reported in June.
Industry experts are closely monitoring the decline in international lithium prices, which currently average US$10,483 per tonne of lithium carbonate equivalent (LCE), a significant drop from the US$80,909 recorded in November 2022. This price reduction can be attributed to an oversupply and diminished demand for electric vehicles globally, as lithium is primarily used in battery production. The cessation of subsidies for electric vehicle purchases in China has further exacerbated the market’s contraction.
In light of these developments, mining companies are implementing cost-cutting measures to ensure the sustainability of their lithium operations. However, the Argentine government remains optimistic about future prospects for the sector.
A recent analysis by Maximiliano Ramírez, the macroeconomic programming undersecretary at the Economy Ministry, noted that the lithium market is relatively small compared to other metals, rendering it vulnerable to sudden price fluctuations. The economist predicts that prices will stabilize, averaging US$20,800 per tonne between 2025 and 2027.
The administration of President Javier Milei, alongside multiple foreign mining firms, holds high expectations for the lithium sector. Investment continues to flow into lithium projects in Argentina, including a recent announcement that South Korean company Posco will inject US$2 billion into the Hombre Muerto salt flat located in northern Salta province.
Additionally, French company Eramine Sudamérica, in collaboration with Chinese firm Tsingshan, plans to open the first lithium mine at the Centenario-Ratones salt flat and is also developing a second site with an investment of US$800 million.
Chinese battery production leader Ganfeng is also considering a US$1 billion investment for its Mariana project in the Llullaillaco salt flat.
During a recent appearance in Congress, Cabinet Chief Guillermo Francos stated that the completion of these lithium projects could contribute approximately US$47.1 billion to Argentina’s economy over the next few years, reinforcing the country’s status as one of the leading lithium producers worldwide.
By the end of 2024, lithium carbonate production in Argentina is projected to exceed 80,000 tons, marking a significant increase from the 44,000 tons produced the previous year.