+1 (520) 780-6269 investment@latamfdi.com

Lithium in Argentina: How much production and exports increased in 2023, and what are the prospects for 2024?

by | Feb 3, 2024

Lithium production in Argentina broke another export record, and the prospects are encouraging. This is due to the expansion of capacity and the expectation of a recovery in carbonate prices.

The year 2023 would have ended with an export record for lithium in Argentina. The mineral is vital for the manufacture of batteries used in electric vehicles. Based on official data for the first ten months of the year, which showed external sales of lithium of USD 682 million in that period, a study by the Rosario Stock Exchange (BCR) projected that 2023 would close with external sales of almost USD 900 million. This represents a growth of 27% compared to the 2022 figures.

From January to October, the report states, “more than 28,000 tons of lithium carbonate were shipped as of October of 2023, a product that represents more than 80% of exports of lithium in Argentina,” The development of lithium production in Argentina has been exponential, as the country exported USD 28 million at the beginning of the century and only in 2016 did it surpass the USD 100 million barrier. In turn, the jump in export value from 2021 to 2022 was primarily influenced by the recently rising price of lithium.

Lithium production in Argentina will expand in 2024

As for the future, “With significant progress in many projects in 2023, it is expected that 2024 will begin with more production capacity and that lithium extraction in Argentina will continue to expand during the year. Towards the end of 2024, the productive capacity of Argentine lithium is expected to more than quadruple compared to the levels seen at the beginning of 2023,” the Rosario report projected.

The BCR also warned that the recent imposition of export duties for mining would impact the development of gold, silver, copper, and lithium projects in Argentina. As is observed in agribusiness, the imposition of this type of tax on productive activities affects development and production, slowing it down in many cases, the authors wrote.

The collapse of the price of lithium

On the other hand, it is worth highlighting the sharp drop that the price of a ton of lithium carbonate suffered in the last year: after bordering on USD 80,000 per ton at the end of 2022, in the spot markets, it was trading at the end of 2023 below 15,000 dollars, although it is more difficult to estimate the impact of this reduction on the value of exports, which in most cases is tied to contractual supply volumes and prices with buyers.

“The recent price declines are partly explained by the liquidation of stocks of battery cells, which has temporarily reduced the demand for lithium for their production,” explained the BCR.

According to the study, once the liquidation of stocks is over, the price outlook would become bullish again due to the cut in global supply. “China’s economic dynamics will be another key issue in the global lithium and battery markets. Any potential slowdown in the world’s leading battery market could act as a bearish factor for the global prices of lithium products,” says one passage in the report.

Still, global lithium demand is expected to increase 5-fold from 2022 to 2030, according to the IMF.

Projections for lithium production in Argentina are highly encouraging compared to other countries that supply the mineral globally. According to the consulting firm CRU Group, until 2027, lithium production is expected to grow 8% annually in Chile and 16% in Australia, while the average annual increase in Argentina aspires to be 50%.

Elon Musk is interested in lithium in Argentina

President Javier Milei assured that Elon Musk, co-founder and principal shareholder of Tesla, the world’s largest producer of electric vehicles, called him because he is interested in procuring lithium from  Argentina.

In this framework, the governor of Catamarca, Raúl Jalil, one of the three river provinces of Argentina (the others are Salta and Jujuy), considered “it is very good” that Musk wants to make investments, but as long as “the rules of the game of the province and economic and social environmental control standards are followed.”

“In Catamarca, there is a lot of legal security and, together with Salta and Jujuy, it has a significant investment boom not only from foreign capital but also from Argentine capital,” Jalil asserted.

He also pointed out that the three provinces, which formed the so-called “Lithium Mesa,” are working to establish “common rules of the game and regulations” for producing and selling lithium in Argentina.

In conclusion, Argentina’s lithium industry has demonstrated remarkable growth, breaking export records in 2023 and projecting substantial expansion in production capacity for 2024. Despite facing challenges such as the imposition of export duties and a sharp decline in lithium prices, the country remains optimistic about its position in the global market. With a concerted effort among provinces to establish common regulations and environmental standards, Argentina aims to maintain its competitiveness. The interest of industry leaders like Elon Musk further underscores the significance of Argentina’s lithium resources on the global stage. As the demand for lithium continues to surge worldwide, Argentina appears poised to play a pivotal role in meeting this demand and contributing significantly to the growing electric vehicle and battery industries.

Contact LATAM FDI to discuss your foreign direct investment plans in Latin America.

Launch of the Angel Investors Network of the Americas

Launching the Angel Investors Network of the Americas signifies a pivotal advancement in supporting Latin American entrepreneurship. With its robust commitment of up to $1 billion and strategic support from organizations like Uruguay Innovation Hub, Endeavor Miami, and IDB Lab, this initiative is set to bridge critical financing gaps and stimulate substantial economic growth

Foreign direct investment in Panama, a strategic destination for entrepreneurs in 2024

Panama’s legal framework treats local and foreign investors equally. Laws such as Law 54 of 1998 guarantee the protection of foreign investments and offer attractive tax incentives. Establishing a company in Panama is relatively simple and quick, and it can be completed in approximately five days.

The United States Bets on Promoting the Chip Industry in Latin America

The initiative’s potential to create jobs, enhance skills, and stimulate local economies could catalyze sustainable growth across the region. Moreover, the focus on strengthening economic ties and reducing migration pressures highlights a comprehensive approach to regional stability and prosperity.

Strategic Moves in the Costa Rican Semiconductor Industry: Competing on a Global Scale

“Costa Rica is a strategic partner for the semiconductor industry, and we are going to facilitate key meetings to present our value proposition to companies in the semiconductor ecosystem,” said the general manager of the Procomer, Laura López.

What country will have the first spaceport in Latin America?

The strategic location of the spaceport at Querétaro International Airport, with its robust infrastructure, makes it an ideal hub for aerospace activities. The construction of specialized hangars and facilities will support various aerospace operations, fostering job creation and economic growth.

Microbusinesses in Southern Paraguay are booming

What is there in southern Paraguay that is attracting investments like a magnet? According to the Vice Ministry of MSMEs, in 2023, almost 367,000 economic units had been formalized in Paraguay, of which 88% are microenterprises.

Investment Between Mercosur and the UAE: New Horizons

The Foreign Ministry of Argentina and its fellow MERCOSUR members are promoting a Comprehensive Economic Partnership Agreement with the United Arab Emirates (UAE). Such a partnership will result in four additional opportunities for investment between Mercosur and the UAE.

Bitcoin and beyond: the wave of cryptocurrencies in Latin America

As Latin American nations continue to explore and adapt to the world of cryptocurrencies, the potential for economic transformation and greater financial inclusion becomes increasingly evident, setting the stage for a dynamic future in the digital economy.

Subscribe To Our Newsletter

Join our mailing list to receive the latest news and updates from our LATAM FDI team.

You have Successfully Subscribed!