Buenos Aires Hours | Lithium nationalism takes root in region with most resources

0

Politicians in Latin America, a region that accounts for more than half of the world’s lithium resources, are seeking to increase the state’s role in an industry crucial to weaning the world off fossil fuels.

In Argentina, state-owned energy companies are entering the lithium sector as authorities attempt to develop downstream industries. In Chile, a leader presidential candidate wants to do something similar just as the nation drafts a new constitution that could lead to stricter rules for minors. In Mexico, the government is studying the possibility of nationalizing lithium prospects.

True, no one in power talks about the expropriation of productive assets, and much of the anti-investor rhetoric in Chile comes from opposition groups. Yet by exacerbating inequalities and exposing supply chain vulnerabilities, the pandemic is fueling resource nationalism that could lead to less favorable conditions for producers just as they thrive in an emerging lithium battery boom. -ion.

“Country and resource reliability is something that auto and battery makers are looking at,” BTG Pactual analyst Cesar Perez-Novoa said. “So it’s a risk.”

Argentine state oil driller YPF SA confirmed this month that it will explore lithium and get involved in supplying battery production through a new unit – a strategy similar to that used to diversify into energies. renewable.

Another state-owned energy company, Ieasa, whose role of President Alberto Fernandez is reinvigorated after the previous government sought to privatize many of its assets, has said it will incorporate lithium into its business strategy, without further clarification.

Lithium-producing countries have had little success in adding value to their raw materials industries due to their remoteness from demand centers and an sometimes unfavorable business environment. In the case of Bolivia, downstream investment requirements have been one of the barriers to extracting lithium from the ground in the first place.

Argentina is banking on close ties with China, its lender of last resort, to open the door to the dream of local battery and electric vehicle factories. Argentine officials are in talks with Gotion High-Tech Co and Ganfeng Lithium Co.

Adding fuel to the fire in Argentina is a bill drafted last year by lawmakers in the ruling Frente de Todos party which seeks to declare lithium a “strategic resource.” Yet the bill is not currently under consideration, a party spokeswoman said.

In Chile, the largest supplier of lithium after Australia, a process of rewriting the constitution is expected to include a debate on how to capture more of the sector’s profits, stricter licensing requirements and the classification of water as as a national asset for public use.

It is not known whether a new constitution could overturn property rights given that the state already owns the minerals, said Renato Garín, professor at the Faculty of Law at the University of Chile, who was elected to the convention drafting the charter. Rather, the change will likely lie in environmental rules as concerns grow about the impact of lithium mining in the Atacama salt flats.

“What the new constitution will push is a leap away from mining capitalism to encourage more investment in technology,” Garín, a left-wing independent member of the assembly, said in an interview. “How to produce without destroying.

The strongest comments came from Mexico, where the government is studying state control over assets. Mexico does not yet produce lithium and, according to analysts at BTG Pactual, rhetoric is unlikely to turn into action. But this still maintains uncertainty.

Bolivia is also trying to move forward with a state approach to develop its vast deposits. After launching a series of pilot projects over the past decade – including giant evaporation ponds to replicate the brine extraction method used in Chile and Argentina – the landlocked nation is turning to new technologies.

Bolivia has launched a tender to test direct lithium mining techniques, or DLEs, with winners to be announced in the coming weeks as the state-owned lithium company and its partners complete their work. on processing prototypes and battery factories. However, Bolivia’s DLE and downstream experiences do not guarantee a significant increase in production in the near future.

related news

by Jonathan Gilbert & Daniela Sirtori-Cortina, Bloomberg

Leave A Reply

Your email address will not be published.