As reported by Customs, the measure was taken to “Disarticulate irregularities detected and investigated over the last two years in lithium carbonate exports.” reference prices, “they avoid under-invoicing maneuvers in sales abroad”, and therefore “allow to avoid abusive maneuvers that affect tax revenues and the correct liquidation of foreign currency”, they described. In 2021, exports exceeded 27 thousand tons for US$185 million.
Although reference prices already exist in the mining sector, the measure generated anger and crossfire within the sector. In fact, since 2020 the AFIP has established this same mechanism for 20 other export complexes, such as beef. The anger of the companies towards Customs is due to the price set at US$53. Private sources commented that sales may be below that value. “We will have to see how it is implemented, in 2021 the average international price was US$38,” a source commented.
In addition, in the sector there is strong anger towards a specific company: the North American Livent, given that the measure impacts any exporting company, but the one that was being investigated for irregular maneuvers was Livent. Although today there are only two companies that export lithium carbonate, the truth is that there is a strong international interest in landing in the production of the star mineral of the moment. In addition, mining companies that do not operate in the lithium market are very upset by the “bad reputation” that this generates for a sector that seeks to expand, and is questioned by environmental associations.
The first questions about Livent arose from legislators in Catamarca, a province where the company has been operating for more than 20 years. They asked AFIP for information about the operation, accusing it of exporting lithium to itself at a value much lower than the market value. The price of the presumed underbilling determines what taxes the company pays. In the market, they estimate that the company could reject the objections, since there were no reference prices for the mineral.
In any case, the determination of AFIP’s reference prices, published in the midst of these provincial complaints, was an investigation that the agency had been carrying out for some time, because it is a sector with strong potentialas it is a key input for batteries in the framework of the transition to electromobility.
The noise scaled the Argentine borders and was felt throughout the world, due to the falls in company shares. In any case, from the Government of Catamarca they reported that the news will not stop investments. In fact, this Wednesday the governor, Raúl Jalil, received representatives from the Albemarle and Galan Lithium mining companies. In addition, in an official statement, they reported that Livent filed “corrective affidavits” and will pay $127 million for “adjustment in the calculation of royalties.” Ámbito consulted the company but for now they will not make any statements.
Argentina is the fourth producer of lithium worldwide, and the second in quantity of resources. There are 6 projects in the construction stage to start operations, and the 2 companies that currently operate are in the expansion phase, which could up to sixfold production in the next 5 years. As this newspaper learned from a consultant who preferred not to be mentioned, Asian lithium battery companies, which buy carbonate in Argentina, welcome the fact that there are “clear rules.” The next project to come into operation in the second half will be Olaroz Cauchari from the Exar mining company.
Source: Ambito
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