These Are the 41 Companies Betting on Argentina’s Lithium: Key Export and Price Forecasts

Buenos Aires — Global demand for lithium will continue to grow in the coming years, propelled predominantly by a rising production of electric vehicles. While the price for lithium used in batteries has dwindled toward historic lows, an exclusive report to which Bloomberg Línea shows that a balance between supply and demand could be reached in the near future.

With 64 projects currently under development or already extracting lithium, Argentina is the second country with the most resources in the world, and comes third in total reserves; currently, it is also currently the fourth largest producer globally, and is expected to become the third by the end of this decade.

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These are some of the findings from a report prepared by the consulting firm Aleph Energy, led by Daniel Dreizzen, which analyzes the global lithium market while delving into Argentina in greater detail. These are the 41 companies of various characteristics that participate in the country’s 64 projects.

Lithium companies in Argentina

Among the 41 companies —in some cases, more than one company owns the same project— currently operating lithium projects in the country, Dreizzen has noted that some are not only involved in mining, but also in the manufacturing of electric batteries or chemicals (Ganfeng, Livent, Albemarle); some are exclusively mining companies (Río Tinto, Eramet, Posco); while others are international companies with assets solely in Argentina (Lake Resources). Furthermore, there are also national oil companies that have ventured into local lithium in recent years (Pluspetrol, Integra, PAE, Tecpetrol).

These companies have headquarters in several countries, including Australia, Canada, South Korea, China, the United States, France, among others.

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Seven companies control 80% of the world’s lithium market. Arcadium Lithium, the firm that resulted from the merger between Livent and Allkem, two of the three companies that were already producing lithium in Argentina, accounts for 13% of global production. Output has quadrupled in the last ten years, but is still attributable to only a few countries and projects.

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International lithium price

One of the challenges faced by the sector is the absence of a robust and international price benchmark, as well as the volatility of the spot price. This price, which reached US$80,000 per ton of lithium carbonate at the end of 2022, dropped to $20,000 by December of 2023.

Forecasts by Wood Mackenzie suggest that there is still potential for the price to decline, although it is expected to recover in the medium term to achieve a balance with demand. The anticipated increase in prices is projected to commence in 2028.

According to Aleph Energy’s report, the price drop in 2023 can be attributed to an increase in supply and a reduction in demand due to the use of stocks. Between 2024 and 2025, there will be an influx of new projects and expansions of current production levels, which will contribute to increasing supply. From 2026 onward, the growth in supply will be limited.

“The only thing that can jeopardize the price of lithium is the discovery of a significant amount of lithium elsewhere, massive discoveries, which can happen, because not much lithium has been discovered so far,” said Dreizzen in a conversation with Bloomberg Línea.

Regarding the use of this key resource for the energy transition, the report details that lithium constitutes between 7% and 10% of each battery. On average, a vehicle uses 55 kilograms of lithium carbonate for its battery cathode, equivalent to what 17,000 cell phones require.

How is lithium produced in Argentina?

The development of a lithium project involves numerous phases, which the report divides into three: prospecting and exploration, development, and production. The first two phases can each take up to five years, while production can last up to 40 years.

Global lithium resources are currently estimated at 98 million tons, of which 58% are found in brines, as is the case in the so-called lithium triangle, comprised by Chile, Argentina, and Bolivia.

In the Argentine case, these resources are concentrated in three northern provinces: Catamarca, Salta, and Jujuy, which stand out due to the low impurity concentration found in their lithium.

Two Argentine sites, Salar de Hombre de Muerto and Salar Cauchari - Olaroz, are already producing lithium hydroxide and lithium carbonate, and are among the top three with the highest lithium concentration in the region, behind Salar de Atacama in Chile. They are also among the top three with the lowest impurities.

Dreizzen explains that lithium production in brines is more cheaper to extract than than when the metal is found in pegmatites and granite, as is the case in Australia, the world’s main producer, or Brazil. “The benefit is that salt flats don’t require spending as much energy, because evaporation does a large part of the work, and then it’s easier to separate it compared to when it’s in a rock, allowing for low-cost and highly competitive lithium carbonate production,” explained the author of the report.

Technological debate

In lithium brine production, companies are currently debating between two technologies for resource separation: evaporation in pools or direct lithium extraction. In the country, traditional pond production is currently prevailing, although an increasing number of companies are researching and investing into the development of direct extraction (DLE), which is considered more sustainable.

“The evaporitic method has been tested out more. It is clearer that it works, and how it works, while the DLE technique is newer,” explained Dreizzen. However, he clarified that “many of the projects that are currently in the identification phase have not yet defined their technology.”

The Aleph lithium report identifies 64 projects in the country, of which three are already in production, and seven are under construction. The latter phase has had two direct impacts on the Argentine economy, in the shape of employment and imports.

Mining employment has been on the rise, with the Mining Secretariat, reporting 38,853 workers in May of 2023, of which 10% can be attributed to lithium projects.

Up to July 2023, lithium accounted for 92% of mining-related imports, explained by companies currently undergoing the construction phase. Nevertheless, it is a sector that is widely in surplus. Outside of these, there are six projects in the feasibility process, fourteen in pre-feasibility, and 32 in exploration.

Export potential Argentina’s lithium

If Argentina manages to bring all of projects to production , the country would produce up to 1.5 million metric tons of lithium carbonate equivalent per year, exporting around US$30 billion. This scenario could be achieved by 2040, according to Dreizzen’s estimates.

In the projections outlined by the report, it is estimated that exports from projects in production and under construction would reach US$8 billion by 2028. Similar figures are provided by the Mining Secretariat, which estimates US$8.7 billion for the same year.

“The potential of Argentina with lithium is immense, and the growth is going to be very significant. Only with the projects under construction and those currently active, production would multiply by six,” said Dreizzen. He highlighted some of the bottlenecks facing this industry and the learning curve it must go through: “There is technological risk. Logistics and infrastructure are still complicated in northern Argentina, there is a lack of suppliers, transportation is insufficient, and restrictions on accessing foreign exchange from exports also slow down development.”

Dreizzen says these are conservative figures, calculated only based on projects in production and under construction, and at the current lithium price (US$20.000 per ton). “It’s a business that will work in the coming years, a proven solution for cars, and more cars with lithium batteries are being manufactured and sold,” said the director of Aleph Energy.