The price of lithium, one of the minerals in vogue to be a key input in the batteries of electronic devices and electric vehicles, comes in sharp decline. From November last year until now, its international price almost 70% collapsed Given the expectations of a lower demand for electric cars. In this context, a question that arises is whether This situation may have an impact on ongoing projects in Argentina.the world’s fourth largest producer of the mineral.
From 2021, with the incentive of being a promoter of a transition to cleaner energy, the price of the so-called “white gold” was growing significantly. However, the lithium carbonate that is traded in China, one of the countries with the largest capacity for “refining” the mineral, has gone from US$82,776 a ton, in November 2022, to US$27,289 last April.
What caused the fall? Basically due to the lower demand for electromobility. that’s how it happened China has withdrawn incentives to purchase electric vehicles and production of those units has decreased by half in the past year. This situation, in addition to the different policies adopted by most the widespread use of sodium batteries, It could have limited the growth of lithium, explained Franco Mignacco, head of the Chamber of Mining Entrepreneurs (CAEM).
In a presentation on the sector’s prospects for this year and, shortly after the inauguration of the next sector fair in La Rural (Arminera, between 22 and 24 May), the manager commented on his vision of the lithium market: “We expect very volatile prices in the coming years due to this lower global demand for electric mobility, but which will continue over time”, he commented when asked.
As for the impact it can cause in ongoing projects that exist in Argentina, Mignacco underlined it “They don’t jeopardize ongoing projects” which add up to about 23 in total. “Lithium is here to stay,” he said, and was confident that lithium’s potential will be maintained for the long term. In addition to the two projects in production, two in production (Livent and Sales de Jujuy), there are six under construction, about nine in advanced exploration and another six in early stages, he explained.
Meanwhile, in the short term, the mining sector deals with the government -like other branches of the economy- to get the inputs needed to produce and also to maintain the profitability of projects. “Today due to the discrepancy between the official dollar and the blue, there is a significant deterioration in costs especially in gold and silver projects”, commented the director of CAEM.
That’s why the chamber holds conversations with officials waiting for a dollar differential which allows them to compensate for the loss of competitiveness they claim to have.
Up to now, the government has not given them a favorable response. “But we will continue to insist that there will be a significant reduction in the export pie in the next few years”, warned the entrepreneur. Previously, Mignacco had highlighted it Mining was one of the three sectors that contributed the largest amount of foreign exchange to the country in 2022, after liquidating exports or US$3,858 million.
Among the demands that the sector supports with the officials there is also the need for faster approval of the SIRAs, the permits to import inputs. According to CAEM, the industry has more than 4,000 approvals pending. Entrepreneurs say the government is approving permits “in drops” and that this fuels the danger of cutting the payment chain.
NS
Source: Clarin
