International investors eye lithium mining in Argentina

Lithium mining has become a central element in several countries’ strategy to transition from fossil fuels to renewable energy.

Saudi investors are aware of Argentina’s major role in this respect. Earlier this month, a delegation from the Saudi Energy Ministry visited the province of Catamarca, in the extreme north of Argentina, in order to discuss lithium projects in the area.

The Argentinian northwestern zone, along with parts of Chile and Bolivia, form the so-called Lithium Triangle, an area in the Andes where more than 50 percent of the world’s lithium deposits are located.

Chile has been leading lithium exploitation in the region, with the first projects beginning in the 1980s. Argentina started exploitation there in 1997.

With the electromobility boom in the past decade, new lithium endeavors were implemented in Argentina, with an operation starting in 2015 and another in 2023, besides dozens of exploitation initiatives.

The growing lithium exploitation will also require the development of local infrastructure, Delbuono said, especially transmission lines and roads.

The logistical infrastructure projects have been drawing the interest of groups from neighboring Brazil, analysts say.

While there are several positive aspects for potential investors in lithium projects in Argentina, some elements still need to be tackled.

In recent months, Jujuy province has faced continuous protests by Indigenous groups, peasants and other social segments over the approval of a new provincial constitution that is seen as tailored to benefit lithium mining to the detriment of local residents.

The demonstrators fear that the scarce water in the region will be diverted to the lithium plants and will not be adequately available for them anymore.

The country’s macroeconomic situation — which has been unstable over the past few years, with high inflation and debt — is also a challenge.

However, as financial hardships made access to credit more difficult and expensive, the entry of new foreign investors could represent a win-win situation.