According to the latest report from Argentina's National Mining Secretariat, lithium is not far from taking over as the leading mining industry item, whereas gold and silver continue to lead.
The document released by the agency headed since December by former Catammarca provincial Mining Minister Fernanda Ávila shows data up to July of 2022, proving that last month mining exports amounted to US$ 291 million, 15% more than in July 2021, accumulating US$ 2.209 billion in the first seven months of the year, a 31% growth yoy.
The two main mining provinces remain Santa Cruz and San Juan. Santa Cruz showed with foreign sales of US$ 1 billion million (45.2% of total exports), and San Juan's US$ 524 million (23.7%). But in the northwest provinces, the business is picking up pace due to lithium.
While mining exports from Santa Cruz and San Juan increased by 14.9% and 23.3%, those from Catamarca, Salta, and Jujuy, Argentina's lithium triangle, increased by 65% in the same period.
In July, Santa Cruz's mining exports fell 33.3% year-on-year and were, for that month, the lowest in the last four years. However, those of Catamarca, Salta, and Jujuy combined increased by 131.8%.
These three provinces of northwest Argentina already account for almost 29% of the country's mining exports, surpassing those of San Juan, and their weight in the last months is even greater. In July they exported US$ 128 million, almost 35% more than the US$ 95 million of Santa Cruz. In July, moreover, lithium sales exceeded silver sales and alone represented 15% of the country's mining exports.
Although the country's main mining businesses are still in San Juan (Veladero) and Santa Cruz (Cerro Vanguardia, Cerro Negro, Cerro Moro), focused on gold and silver, lithium deposits such as Salar de Olaroz and Pirquitas in Jujuy and Lindero in Salta are already on the map, and the multi-million dollar project of the Chinese company Ganfeng Lithium, which at the beginning of July bought for US$ 962 million the rights of Lithea Inc. over two lithium salt ponds in Salta, which, unlike Catamarca and Jujuy, still does not export the white gold. Ganfeng is one of the battery suppliers of Tesla, the world's leading electric vehicle manufacturer. And China accounts for 80% of the world's battery production: 558 GWh in 2021, compared to 44 GWh for the USA and 28 GWh for second-placed Hungary.
The United States is also very interested in Argentine lithium. A year ago, a study by the Center for Strategic and International Studies (CSIS) pointed out that Argentina is the most promising case for the expansion of the lithium industry. The country, the study emphasized, has the second largest reserves in the world, behind Bolivia, and the third largest commercially viable reserves, behind Chile and Australia, and highlighted two operations in progress, in Jujuy and Catamarca: the Olaroz and Hombre Muerto salt flats. The study, signed by Ryan Berg, Senior Researcher at CSIS, underlined that the country is the main supplier of lithium to the USA, and based on official data, it specified that between 2016 and 2019, 55% of the lithium imported by the USA came from Argentina, followed by Chile (36%) and China (5%).
Behind this dynamism of lithium is the so-called energy transition, concepts such as electromobility, phenomena such as Tesla, with an impact on the global automotive industry, and the increase in the prices of minerals needed to manufacture batteries, such as nickel, graphite, and lithium. According to Trading Economics, in the last twelve months, the price of lithium carbonate increased 335% while the price of gold and silver fell 5% and 21% respectively.
Mining exports still do not have a great weight in Argentina's exports: in the first seven months, they accounted for little more than 4% of the total. But it is one of the sectors (the others are Energy, Agroindustry, and Knowledge Economy) to which the economic team headed by Sergio Massa is betting to attract international investments with export projection. The main limitation continues to be the exchange rate regime and how unattractive it is for foreign investors to bury capital in a country that does not provide security of access to foreign currency.
Gold (61.5%) and silver (38.3%) account for more than 99% of Santa Cruz's mining exports, while gold alone accounts for 96.5% of San Juan's exports. In the northwestern provinces, the basket is more balanced and is shifting towards lithium, which in the first seven months of the year accounted for 52.7% of mining exports, compared to 24.3% for gold and 15.7% for silver.
As for the destination of exports, Switzerland (35.2%), the USA (33.1%), and Canada (21.9%) absorbed more than 90% of gold and silver exports from Santa Cruz and Switzerland (51.4%) and India (45.1%) more than 95% of those from San Juan. The provinces of the lithium triangle have a more diversified clientele: they sell 25.7% of their minerals to the USA, 24.8% to China, 17.2% to Japan, 10.3% to South Korea, and 22% to the rest of the world.
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