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South America Steps Up Efforts to Turn Lithium Into Batteries – Bloomberg

  • Argentina, Chile, Bolivia and Brazil plan to coordinate action
  • Adding value ‘is central,’ Argentina mining official says
Workers load salt deposits onto trucks inside a state-owned lithium production facility in Potosi, Bolivia.
Workers load salt deposits onto trucks inside a state-owned lithium production facility in Potosi, Bolivia. (Carlos Becerra/Bloomberg)

James Attwood, Jonathan Gilbert and Mariana Durao, Bloomberg News

SATIAGO/BUENOS AIRES/RIO
EnergiesNet.com 03 06 2023

South American nations are stepping up efforts to propel themselves further down the electric-vehicle supply chain by leveraging their vast mineral wealth, expanding processing capacity, and targeting vehicle manufacturing.

Argentina, Chile, Bolivia and Brazil plan to coordinate action on turning more of the region’s mined lithium into battery chemicals, as well as moving into manufacturing of batteries and EVs, according to Argentina Mining Undersecretary Fernanda Avila.

The drive across the key producing regions of South America reflects a burgeoning global trend by resource-rich nations to chart a course away from merely supplying raw materials into higher-value activities to boost growth, raise incomes, and make the most of their resource endowments. In Asia, commodity powerhouse Indonesia has laid out its ambition to become a global battery hub for electric vehicles as demand for greener transport skyrockets.

“We have to prepare ourselves for what’s coming and be able to adapt — beginning perhaps with cells, working toward industrialization, and getting to batteries,” Avila said in an interview from Toronto, where she’s part of the Argentine delegation presenting at the annual PDAC Convention. 

The so-called lithium triangle of Argentina, Chile and Bolivia account for more than half of global lithium resources, and both Brazil and Argentina have auto-making experience. That could be the basis of a regional electro-mobility platform, she said.  

So far, South America has seen limited success moving into higher-value lithium products — let alone making batteries or EVs on a commercial scale. But political will, technological shifts, and geopolitical tensions may aid their push.

Lithium resources graph - bloomberg

The Ukraine war and concerns over China’s dominance of key parts of the supply chain are accelerating the splintering of traditional trade ties and spurring efforts to foster local industries, especially those involved in the energy transition.

The US Inflation Reduction Act, which President Joe Biden signed into law in August, is pushing EV makers globally to produce more vehicles in North America and secure the key minerals for them outside of China, in particular in nations with free-trade agreements with the US such as Chile and Australia. 

Argentina is presenting its case for IRA inclusion, despite not having an FTA with the US. But the focus is on adding value at home, Avila said. The country has set up a working group with its three main lithium-mining provinces, recently broadening the scope by adding other government entities and private-sector representatives. The group has started to discuss setting aside quotas of lithium for domestic use, prices for which would probably be tied to the market “but in some way preferential.” 

Chinese carmaker Chery Inc. wants to build a $400 million EV and battery plant in Argentina amid a rush into Andean lithium supplies. Jujuy, one of three lithium-producing areas of Argentina, is in talks with a company from China to make battery cathodes in the province, according to Governor Gerardo Morales. Jujuy is also working on a broader provincial framework featuring tax cuts to lure investments.

The idea is to lay the groundwork for making batteries locally, with China’s Ganfeng Lithium Co. and Gotion High-tech Co. already expressing a willingness to help. There’s also a lot of interest from European, Asian and US companies, Avila said.

“Adding value is central for us,” she said. “We know the industry today is growing and there’s a lot of pressure and price volatility. But it’s about making the most of this window of opportunity, not just by shipping out lithium carbonate.”

bloomberg.com 03 05 2023

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