How Argentina’s New Power Moves Look to Lure Even More Lithium Interest Towards the Country

February 08, 2024 -

USA News Group – Freshly off of a startling win, newly elected Argentinian president Javier Milei is already gearing up to launch his country towards being a Top 3 lithium producer by 2027. Beginning with an ambitious deregulation push, Milei is aiming to cut costs for Argentina miners, and is already priming for an important meeting with Tesla, Inc. (NASDAQ:TSLA) (NEO:TSLA) CEO Elon Musk, potentially in 2024, to talk about Argentina having a larger role in the battery supply chain. The country’s lithium growth is set to explode at a rate that’s six times larger than Chile’s, and three times larger than Australia’s by 2027, according to the Rosario Stock Exchange (RSE) in a new report. Tesla isn’t the only major automaker in the hunt, as both Stellantis N.V. (NYSE:STLA) and Ford Motor Company (NYSE:F) have dipped their toes into Argentina’s brines. Beyond Argentina’s potential deregulation, its lithium surge is also being boosted by promising lithium projects including those from Lithium South Development Corporation (TSXV:LIS) (OTC:LISMF), and Albemarle Corporation (NYSE:ALB).

Fresh off of reporting ( September 12, 2023 news release ) a 175% increase in lithium resources in a new NI 43-101 technical report for its 100%-owned flagship Hombre Muerto North Lithium Project (HMN Li), Lithium South Development Corporation (TSXV:LIS) (OTC:LISMF) recently announced a new cooperative development agreement with Korean giant POSCO, which should help expediate the process towards production.

Now the project's resource has reached an impressive total of over 1.58 million tonnes of lithium carbonate equivalent (LCE). Consequently, Lithium South and POSCO have decided to collaborate equally in the development of the HMN Li’s Norma Edit and Viamonte claim blocks, sharing the brine resources. These adjacent blocks are situated next to Arcadium Lithium, positioned strategically within the Hombre Muerto Salar, a crucial area in the Lithium Triangle.

“We are immensely pleased to join forces with POSCO, a leader in lithium and steel production,” said Adrian F.C. Hobkirk, President and CEO of Lithium South. “This partnership is a step forward for both companies. Together, we're paving the way for rapid advancement in lithium extraction and sustainable energy solutions.”

In their recent NI 43-101 technical report, Lithium South detailed a pioneering technique to increase lithium extraction from brine water. This approach involves a well-established industry process of evaporating lithium-rich brine, a procedure Lithium South has optimized to achieve recoveries higher than are usually achieved with evaporation.

"We are very pleased with the substantial upgrade in our LCE Resource at the HMN Li Project and are excited to potentially achieve much higher lithium recoveries,” said Hobkirk. “We await the completion of our updated Preliminary Economic Assessment (PEA) which will further evaluate our newly defined, high quality lithium brine resource."

After cutting its annual forecast for 2023 and being rejected by Liontown Resources in a $3.7 billion takeover bid, Albemarle Corporation (NYSE:ALB) continues to be the largest lithium company by market cap, and an ongoing supplier to Tesla, Inc. (NASDAQ:TSLA) (NEO:TSLA).

In Argentina, Albemarle has controlled the Antofalla lithium resource in Catamarca Province since 2016. The property spans 10,050 hectares, which is roughly the equivalent of 10km2, and is one of the largest resources in the country. Historical exploration activities in Antofalla's central area revealed a large mid-tier resource, initially acquired by Albemarle. Since this acquisition, Albemarle has intensified its exploration efforts in Antofalla through further property purchases and drilling operations.

Shortly before ending its bid on Liontown, Albemarle had secured a supply deal with Ford Motor Company (NYSE:F) to provide over 100,000 tonnes of battery-grade lithium hydroxide over a five-year span, commencing in 2026. The aforementioned Liontown also has a 5-year deal with Ford for up to 150,000 dry metric tonnes of spodumene concentrate per year, which when signed was expected to start this year—with that supply coming from Australia.

For Stellantis N.V. (NYSE:STLA), makers of popular car brands such as Dodge, Chrysler, Maserati, Jeep and others, getting a foothold in Argentina’s lithium supply was important enough to buy a roughly 20% stake in a subsidiary of Argentina Lithium. This initiative is part of a broader strategy to dominate the entire electric vehicle (EV) value chain, encompassing everything from battery technology to electric motors and electronic transmission systems.

“[Stellantis] approached us a year ago because of our reputation as a successful mineral exploration pioneer in Argentina,” says Nikolaos Cacos, President and CEO of Argentina Lithium in an interview with The Northern Miner. “They didn’t want a control position — their interest was to secure an optionality for lithium. It’s the offtake they were after.”

Having broke ground on a massive lithium refinery in Texas back in May of last year, it’s understandable why there’s a lot of attention over where EV giant Tesla, Inc. (NASDAQ:TSLA) (NEO:TSLA) will secure its future lithium supplies from. Hence why the talk about Milei and his ambitions to lure Elon Musk towards a meeting in Argentina is ramping up.

Argentina, holding the largest confirmed reserves in Latin America and accounting for a remarkable 21% of the world's total, still lags behind Chile in market influence, contributing to only 6% of global sales. Meanwhile, Chile surpasses with a significant 20% lead in worldwide sales figures.

Already, Milei made a gesture towards Musk by altering his country’s internet rules to make way from Starlink, Musk’s satellite internet provider.

“Javier Milei has just talked to Elon Musk and invited him to Argentina,” Milei's office wrote on X. “We are back to integrate ourselves into the world.”


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