The news site “Investor Intel”, which provides information to investors, and coverage of the capital market, published an article by Christopher Eccleston, a strategist in the field of mining and economics, about the prospects for the future of lithium in the country of Argentina, explaining that if Saudi Arabia is the largest exporter of oil in the world, it would Argentina will be the world’s largest exporter of lithium by 2030.
At the beginning of his article, the writer pointed out that the former Chinese leader, Deng Xiaoping, is the most famous in mining circles because of his famous saying, which he used to repeat often: “While Saudi Arabia owns oil, China owns rare earth elements.” His statement did not receive much attention at the time because the “rare earth elements” – meaning lithium – were largely a mystery to most of the listeners at the time, and moreover, these “rare earth elements” did not deserve all that much attention; There weren’t many technological applications like those used in daily life now.
The report questions how much lithium Argentina likely has. He answers that, in theory, Chile was the source of obtaining lithium from lithium deposits found in salt water lakes (salt flats), but in a strange situation as if a player scored a goal against his team, Chile wasted this advantage by trying to tighten control over the number of players in the field of lithium, Giving preference to the current players. Projections indicate that Argentina will overtake Chile in the lithium production race by 2030.
As a result of Chile’s coolness in welcoming the new arrivals, Argentina became the place to be for those who wanted a place in the salt flats. On lithium, Argentina is more like Saudi Arabia on oil, to paraphrase Deng.
Lithium: Volatile fortunes
The writer points out that one of the paradoxes of the mid-decade was the “underestimation” of salt flats, as their nature is “too hard”, or work in them is too “long-term”. Nevertheless, the salt flats were home to companies that wrote distinct success stories during the first lithium boom, such as Orokibri Limited, Galaxy Resources Limited, and Lithium America Corp. Going back to that boom, as well as in the current boom, there is a boom in Argentina, which is part of the lithium triangle in Chile, Argentina, and Bolivia, which makes the stories of the California gold rush in the 1850s little and pale compared to the rush to the Argentine lithium lands today. And explorers literally can’t get enough of Argentina’s lithium lands.
Caution about the exploitation of the salt flats was prompted by the unfortunate events that befell the mining companies Urukipery Limited and Rincon Mining Holdings. However, in both cases the lessons learned mean that other companies will benefit from their difficult experiences. The argument that there is a long wait for salt flats to be developed, because of the need to start the evaporation process, is not sound and does not stand on solid ground; This is due to the long drilling phase, resource estimation, and the high cost of hard rock deposits, and the high development costs of underground mines.
The collapse of Canada Lithium Corp. first, after the end of the first lithium boom, and then the labor pains of Nemasca Lithium, at the start of the latest boom, rattled many investors about its large spodumene (lithium source) mines. Underground.
Scramble for lithium
Despite concerns about Argentina’s political direction, the metaphorical road to Argentine salt flats has recently become more like the highway to Los Angeles at rush hour. Argentina has been in the lithium game for decades, so it is not a beginner, but it has always been seen as second only to Chile. As the path to opportunities to start and develop new businesses in Chile is strewn with bumps and obstacles, many of Argentina’s Andean provinces have become truly thriving cities for global electric vehicle owners.
And joined the companies “Urokibri Limited” and “Galaxy Resources” (they were subsequently merged into one company) with the prestigious “Lyvent (formerly FMC)”, and then there was a stampede in the field of lithium such as the stampede of elephants with the companies “Posco” and “Ganfeng Lithium”. Tianshi Lithium, and most recently, Saigin Mining Group, which has set very high standards with its impressive move to buy New Lithium Corp.
Then, in November 2021, the Toronto-listed Lithium Americas Mining Company offered $400 million in stock and cash to the Vancouver-listed Millennial Lithium Corp., the company’s third offer this year after an offer From Contomburiere Imprex Technology, the largest battery maker in China, and a bid from another Chinese company, Ganfeng Lithium, and beyond these giants, there are a handful of rookie players hoping to replicate the success story of Neo Lithium. Recently, the company “Edison Lithium Corp” drew attention.
The writer hinted that in mid-June 2021, Edison Cobalt Corp., as it was known at the time, announced that it had entered into a definitive sale and purchase agreement to acquire Resource Ventures SA (REV), an Argentine company that owns or It has the right to dispose of the rights of more than 148,000 hectares (365,708 acres) of potential receivables for lithium brine in the province of Catamarca, Argentina. These receivables are located mainly in the geological basins known as Antovaya Salar and Pepanako Salar in what is known as the famous lithium triangle.
To effect the purchase, Edison signed an agreement to acquire Revey, a 100% interest in its holdings, for a purchase price of $1.85 million to be paid by issuing 10 million Company common shares at an estimated price of $0.185 per share. All securities issued pursuant thereto are subject to a custody period of four months from the date of closing.
Argentina and the political landscape
The writer explains that for most of the past two decades, Argentina has been ruled by irregular and non-traditional governments, the latest of which is the Kirchner family, and before that the Eduardo Duwalde regime ruled the country with a short period of fiscal conservatism under Mauricio Macri, the president-elect in the last quarter. from 2016.
The main sources of concern for foreign miners working in the country were:
Currency controls – although the devalued peso theoretically leads to lower project development costs.
Export taxes on concentrates.
Import restrictions on equipment.
Macri’s system put these things right again, and this coincided with the second metal boom of the lithium battery in 2017. Although this boom proved to be transient, it restored activity to those looking to invest in the Argentine scene.
Three years later the Macri regime failed and the Kirchner family returned to power, but the mining train (especially lithium) rarely broke down or failed with the further development of the salt flats next to the increasingly large copper projects of the day.
There is a case that can be taken and answered, which is that the relative shortage of salt flats that moved into production before 2019 was due to the double negatives of the decline in the price of lithium between 2011 and 2016 and the last exodus of the first Kirchner family rule; This made Argentina an unattractive destination for advanced projects. Stabilizing prices solved the problem, and the Argentine government welcomed investment in lithium.
Edison’s switch from cobalt to lithium appears to have been a prescient move. While cobalt is very popular now that it is becoming scarce to find, working in cobalt can be a sport of rhino hunting; laborious and expensive. With Argentina’s rapid development as the “Saudi Arabia of lithium”, no one is expected to go wrong as he moves his company to Catamarca province and builds a significant presence in the lithium business. The writer concluded his article by emphasizing that these are the early days of exploration, resource identification, (and presumed regional expansion) that still awaits us.