Argentina and France have taken a concrete step towards strengthening their bilateral economic relationship with the signing of a cooperation framework agreement for the mining sector. This accord aims to increase investment and financing in mineral resources for energy transition, especially lithium. This strategy gives Argentina a vantage point on international supply chains.
The French Minister for Foreign Trade, Laurent Saint-Martin, and the Argentine Secretary of Mining, Luis Lucero, led the signing of the memorandum of understanding in Buenos Aires, which both described as the start of a new era of cooperation between the two countries. Both stressed that the agreement establishes the mining sector as one of the strategic axes of relations between Argentina and France, as part of a commitment to decarbonization and the energy transition.
Framework agreement to increase French mining companies in Argentina
The framework agreement is intended to provide the platform for the articulation of long-term partnerships and French mining companies in Argentina, precisely for that purpose, the exploitation of the country’s lithium resources. Minister Laurent Saint-Martin has indicated that the document is a starting point for closer bilateral cooperation in the exploration and processing of these critical minerals. It will also allow France to attract companies and investments to the country in the short and medium term. “This will allow us to accelerate opportunities for French companies in Argentina and to promote sustainable mining development practices in line with European and global standards,” said the minister at the signing ceremony.
The Argentinean Secretary of Mining, for his part, emphasized the importance of the agreement to “work on the development of a roadmap with very clear deadlines”. According to Lucero, “Argentina and France will work on permanent technical and political dialogue to identify projects that can have tangible results and the potential to generate value for both countries.” The secretary has also assured that this document “is not just a memorandum of understanding, but the beginning of new actions and a joint agreement to give practical meaning to each of the objectives described in it.”
The Strategic Value of Lithium
Lithium, called “white gold” by some is key to developing the batteries that power electric vehicles (EVs), laptops, mobile phones, and renewable energy storage systems. Therefore, in a world undergoing a massive energy transition towards green energy sources, lithium demand is on the rise, and Argentina is well positioned to play a significant role in the process of its supply.
The United States Geological Survey (USGS) estimates that Argentina has the world’s third-largest lithium reserves, behind Bolivia and Chile, which together are known as the “Lithium Triangle” in South America, a region that alone holds more than 50% of global lithium reserves and which is increasingly at the center of global battery supply chains. In addition, Argentina also ranks fourth in lithium production, behind Australia, Chile and China, according to the latest USGS data.
Argentinian lithium mining is open to foreign direct investment (FDI), unlike in some of its neighbors, which has created a more welcoming regulatory environment for international cooperation. Argentina’s lithium reserves are mostly salt flats located in the northwestern provinces of Salta, Jujuy and Catamarca, which are sparsely populated areas where the mining activity is more than just a business for the nation, but also means job creation and a motor for local economies, a factor that has been attractive for French mining companies in Argentina to take hold in the country.
Mining as a driver of economic development
Argentina is betting on the mining sector to diversify its economy and attract foreign currency, which it badly needs to reduce its fiscal deficit and inject dollars into its foreign currency reserves, and, at the same time, it also represents an opportunity to create jobs in an otherwise underdeveloped region.
In this sense, mining exports have become a growing source of income for Argentina over the years as the country has faced economic volatility, inflationary pressures and external debt. These exports are now part of Argentina’s overall strategy to promote mining not only as a short-term economic relief but as a step towards the country’s full integration into global value chains based on clean energy technologies. In this sense, the framework agreement with France to promote investment and financing in the sector is in line with Argentina’s vision of becoming a more reliable and responsible supplier of critical minerals to the world.
In addition to lithium, Argentina also has rich reserves of copper, silver, gold and other minerals which are vital for electrification and technological innovation. However, it is the former which is the most sought-after for most international cooperation efforts because of the key that it plays in the global energy transition. This means that there is a growing field of opportunity for French mining companies in Argentina which can expand their presence in Argentina, not only in lithium, but also in other critical minerals.
Technical cooperation and environmental standards
Another key aspect of the new Argentina-France agreement is its commitment to technical cooperation. France has much experience in sustainable mining practices and environmental protection, and it is clear that Argentina is also interested in incorporating the former into its local mining sector.
Technical know-how, training and joint research efforts are all expected to be important pieces of this bilateral cooperation. Environmental sustainability has already been a topic of great concern in the globalized world and, particularly in the mining sector, increased attention from consumers, investors and regulatory agencies has placed additional pressure on countries to be environmentally and socially responsible.
The two signatory countries have already expressed their intention to see that the future investments undertaken as part of this agreement will be made taking into account the strictest environmental and labor standards. The memorandum makes reference to, among other things, water management practices, community consultation protocols, and responsible mining operations, with a preference for low-impact extraction methods such as direct lithium extraction (DLE), which reduce the environmental footprint of mining activities. French mining companies in Argentina are expected to be in the lead on this front.
France’s growing investment footprint in Argentina
The latest agreement is but a reflection of broader trends in French investments in Argentina. French direct investment in the South American country grew 43% y/y in 2024, amounting to USD 7.6 billion across a variety of sectors, despite the challenging macroeconomic conditions in which the country finds itself.
A highlight of the sector has been the more than USD 850 million investment that French mining group Eramet has made in Argentina to launch the first commercial direct lithium extraction (DLE) plant in the country in Salta. This has made the company a pioneer in the region’s lithium production modernization efforts, and the facility is expected to increase significantly the nation’s lithium production. Additionally, the Eramet plant in Argentina also sets the standard as a model of sustainable extraction practices in the country.
Eramet’s investment is strengthening the French position in Argentina’s mining sector as well as highlighting the tangible benefits of the type of bilateral agreements like the one signed earlier this year. The plant is expected to begin production in 2025 and could eventually produce several thousand tons of battery-grade lithium per year. Its success will likely become a model for other French mining companies in Argentina as well as investors from other countries in search of similar socially responsible and economically feasible investment projects in the sector.
Argentina’s growing network of mining alliances
Argentina’s memorandum of understanding with France is not the first of its kind, or the most recent either. As Argentina has sought to use its wealth of mineral resources as a diplomatic tool in recent months, a series of similar agreements with other countries have been signed.
The latest have been with the United States (August 2024) and the United Arab Emirates (February 2024). By negotiating cooperation accords in mining, Argentina is aiming to establish itself as a major player in the supply chains that will power the electric vehicle revolution and the global renewable energy build-out. By reaching out to a broader group of countries than has traditionally been the case, Argentina is also trying to change its relationship with the world in a way that will make it less vulnerable to the risks associated with market fluctuations, political instability and overdependence on a single market for its exports.
This growing international network of mining alliances is also giving the Argentine government greater geopolitical influence in a world in which access to critical minerals is becoming more and more important as a source of national power and industrial competitiveness. It is also worth noting that with the global demand at an all-time high and a strong will behind Argentina’s mining diplomacy, it is very likely that this momentum will continue in the years to come.
The road ahead
The Argentina-France agreement for mining cooperation is a very important milestone for bilateral relations which will benefit both nations in economic, technological, and environmental ways. The future will prove how the world is heading in the cleantech revolution, but already it is safe to say that there will be a very important role for a secure and sustainable supply of critical minerals. Argentina has already taken important steps to position itself to play that role and by now it is acting with proactivity.
The road ahead for both countries will require the best efforts of both parties to implement the announced measures, find attractive projects to be invested and financed, and manage the complex environmental and social issues that often accompany mining projects. If successful, the Argentine-French framework could well serve as a role model for other countries seeking to develop equitable and sustainable cooperation in the sector.
For Argentina, this agreement represents one more step in its ongoing process of economic revitalization through the development of its natural resources. For France, the agreement marks a very strategic move to help guarantee access to inputs essential to its green industrial transformation. Overall, this bilateral agreement is a symbol of both nations’ converging interests in the common struggle for a cleaner and more sustainable future for everyone. It also helps solidify the growing role of French mining companies in Argentina as the agents of this process of innovation and international cooperation.