Buenos Aires — Argentina and China this year marked 50 years of bilateral relations, with the Asian giant one of Argentina’s three main trading partners and, at the same time, one of the biggest investors in the country, with a number of infrastructure, energy and communication projects, as well as in other sectors.
In line with their trade alliance, which has continued during the current Argentine government despite the misgivings of the US, during the last few months a number of investment projects have been announced, and which include a new player that is starting to become a common denominator of Chinese interest in Argentina: lithium.
Following are the latest projects with Chinese companies’ investment in Argentina:.
#1 Dam in Santa Cruz
In May of this year Argentina’s government published a decree approving the model agreement for the amendment and reinstatement of the credit line contract for the development of the hydroelectric project that comprises the Néstor Kirchner and Jorge Cepernic dams in the province of Santa Cruz.
The hydroelectric project is aimed at generating 1,310 MW of clean energy, with more than 2,700 workers currently engaged in its development.
China Development Bank, Industrial and Commercial Bank of China and Bank of China are involved in the project. The construction contract for the hydroelectric power plant was awarded in 2013 to a consortium led by Gerardo Ferreyra’s Argentine Electroingeniería, China’s Gezhouba Group Corporation and Hidrocuyo.
China Development Bank is the country’s lender with the largest number of projects in execution in Argentina.
On her last day in office, former economy minister Silvina Batakis approved in Santa Cruz an addendum to the contract according to the modifications that the work had undergone since its beginnings. “This generated a change in the contract, which is what was signed today to continue with the procedures that revolve around the work”, Batakis said at the time.
According to a report from the Secretariat of Strategic Affairs, China Development Bank has already invested $1.35 billion in the project, while $3.36 billion remains to be disbursed. The project is slated for a January 28, 2023 completion, at a total cost of $4.71 billion.
#2 Fertilizers in Tierra del Fuego
A $1.25 billion investment was confirmed in recent weeks to build a fertilizer plant in Tierra del Fuego, an investment that will also be used to improve the province’s ports and build a thermal power plant.
The plant aims to achieve an annual capacity of 600,000 tons of synthetic ammonia and 900,000 tons of urea, among other fertilizers and herbicides.
#3 Electric batteries in Jujuy
On June 24, Chinese company Gotion High Tech signed an agreement with Jujuy provinces’s state-owned mining company Jujuy Energía y Minería Sociedad del Estado (JEMSE) to build two lithium carbonate production plants for electric batteries.
This was confirmed after a meeting between the CEO of the Chinese company, Li Zhen, and Argentina’s President Alberto Fernández.
Gotion High Tech is one of the world’s leading manufacturers of batteries for electric cars, and is a supplier of automakers such as Volkswagen and Geely.
The investment is expected to exceed $12 million.
Agreement to produce lithium
An agreement was also signed this year for Chinese mining company Tianqi Lithium to invest in the exploration, exploitation, production, commercialization and industrialization of lithium in Argentina, in an agreement also reached with Y-TEC, state energy company YPF’s business unit for technological development.
The amount to be invested as part of the agreement was not disclosed.
According to Argentine news agency Télam, Tianqi Lithium is a global new energy materials company, whose main business is lithium. It has businesses in China, Chile and Australia, and is analyzing investment projects in northern Argentina. The company is headquartered in China’s Sichuan province.
Belt and Road
In February of this year, during his visit to China to commemorate 50 years of bilateral relations, President Fernández signed with his counterpart, Xi Jinping, the incorporation of Argentina to the Belt and Road initiative, aimed at stimulating the flow of trade and investments that already has more than 140 countries signed up.
In 2021, Argentina’s trade exchange with China totaled $19.68 billion, representing a deficit of $7.36 billion for Argentina, while so far this year, bilateral trade has totaled $13.65 billion, with a deficit for Argentina of $6.63 billion.
While Argentina exports to China mainly raw materials, such as beef, barley grain and soy beans), China’s exports to Argentina include printed circuit boards with electrical components, glyphosate, and automatic data processing machines, among other products.