Bloomberg Línea — Lithium has become a critical component for electromobility, presenting an opportunity for some Latin American countries. Currently, Chile and Argentina are making the most of it, while Bolivia’s potential remains untapped. Brazil also contributes to global production, but its share is marginal for now.
According to Benchmark Mineral Intelligence (BMI), in 2022, Chile represented 34% of the world’s lithium production, while Argentina contributed 5%. Australia remains the world’s largest producer (43% of the total), and China comes third with 14% of global production.
Other jurisdictions have relatively marginal contributions, accounting for a combined 4% of the aggregate supply. These include Brazil, the United States, Portugal, Zimbabwe, Canada, and Bolivia.
In terms of identified global resources, Chile accounts for 41% of the world’s lithium reserves, followed by Australia (25.4%), Argentina (9.8%), and China (6.7%).
It is often said that Bolivia has the most lithium reserves, but this is a misconception. Bolivia has the most resources, but not reserves. Lithium resources refer to the total amount of lithium present in the earth, regardless of whether it is economically viable or technically feasible to extract and process it.
What Does Lithium Mean for Chile’s Economy?
The Chilean Copper Commission (Cochilco), a state-owned organization, stated in a recent report that, thanks to expansions by SQM and Albemarle, the two lithium producers in the Salar de Atacama, Chile is expected to increase its production from 162 thousand metric tons (kt) of lithium carbonate equivalent in 2021 to 336 kt by 2035.
From a national significance perspective, the rise in lithium prices in 2022 led to Chilean lithium exports reaching $8.14 billion, eight times more than in 2021.
In the same vein, Cochilco states that lithium has become a significant industry for Chile, representing 8.3% of total goods exports in 2022. It has even surpassed exports from established industries such as fruit cultivation and salmon farming. Furthermore, it has nearly doubled the pulp, paper, and other industries and more than tripled the wine industry.
According to the Central Bank of Chile (BCCh), lithium represented 8.2% of total exports in 2022.
What Does Lithium Mean for Argentina’s Economy?
In late May, Cochilco admitted that Chile would drop from second to third place globally in lithium production and cede South American leadership to Argentina by 2035, with a difference of 79,000 metric tons.
Now, what does lithium mean for Argentina today? A report from the Rosario Stock Exchange recently stated that, with approximately $695 million in exports in 2022, the lithium complex ranked as the 18th exporter at the national level. “With production projections from ongoing projects, starting in 2025, Argentina’s lithium production capacity could consolidate it as the fifth-largest exporter in Argentina, based on 2022 data,” according to this entity.
Thus, the lithium complex could export more than $7 billion starting in 2025, according to estimates.
In this regard, of the 49 lithium projects in Argentina’s portfolio, three are already producing and exporting. Two more projects should join production this year. Two more projects are under construction, and there are eight more projects in the pre-feasibility and advanced exploration stages to expand Argentina’s lithium development. It is essential to note that all projects generate external investments and employment in our country before production begins, as they advance in the exploration and prospecting of brines. And so far, this is only talking about direct employment. When we add up the volume of suppliers and indirect employment, the contribution of lithium to the Argentine Northwest region is even more significant.
According to the Rosario Stock Exchange, global lithium demand is a key opportunity for Argentina, and it should incentivize the sector to continue producing and exporting value-added products. As long as the path of investments progresses and conditions for market development are maintained, Argentine lithium expects to advance further and consolidate its significant contribution to the Argentine economy.”