due to benefit in access to dollars, advances investment of US$400 million

due to benefit in access to dollars, advances investment of US0 million

Currently in Argentina there are only two lithium carbonate production projects. The Liex case is one of the 6 that is under construction. The announcement of the second stage of investments came after Scioli delivered the certificate of eligibility of the Investment Promotion Regime for exports. These are incentives established in decree 234, which was published in 2021, which determines the free availability of foreign exchange for up to 20% of exports, in cases where investments exceed US$100 million.

At the moment there are only 2 companies under this regime: along with Liex, a food company had initially entered (Alimentos Modernos SA), after investing US$215 million to establish a factory in the Mar del Plata industrial park. As this newspaper learned, there are two other companies that process this benefit, also from the mining sector.

The Tres Quebradas de Liex SA project plans to generate 1,200 direct and indirect jobs for the export of lithium carbonate. It has already disbursed US$70 million and the new investments will arrive within three years. Production will start at the beginning of 2024, it will be an average of 20 thousand tons of lithium per year for 50 years, and during the period of greatest production (2025-2043) exports will reach US$243 million annually. The amount is higher than more than all that was exported in lithium in 2021.

In addition, last week, the Iraola Group, in alliance with the Chinese giant Gotion High Tech, announced to Scioli and President Alberto Fernández the investment to build a plant to manufacture lithium batteries for cars, bicycles, motorcycles and buses. In addition, they work with the government of Jujuy for a lithium refining plant. Sources from the private sector stated that it will be key for Congress to approve the electromobility law, which has not yet begun to be discussed, to establish a regulatory framework and tax incentives.

“Proper framework”

For Scioli, mining is a “strategic area”, especially given the lack of dollars. “I do not envision another sector, except what is happening in Vaca Muerta, that has the capacity to earn genuine dollars that the country needs so much to feed a virtuous productive circuit that we need”, affirmed this Wednesday in a meeting with the Federal Mining Council (Cofemin) that integrates the different mining provinces. Furthermore, he spoke of a “proper framework” to attract investment and “take advantage of opportunities”.

In fact, there is another important project that is stuck, as Ámbito learned. The Taca Taca copper project in Salta, owned by the Canadian company First Quantum, could already start construction: they have “every intention” to do so, but first they assure that they need to “solve some problems.” It would be a investment for u$s 3600 million, with the possibility of annually exporting US$2 billion in copper. However, the company is analyzing the new withholding regime, fiscal stability and exchange restrictions, given the doubts about whether they will be able to access the dollars to repay the financing required for investments.

In its report on quarterly reviews, the IMF assured that the changes made by the Government for copper withholdings “was aligned according to best practices”. The new regime, optional for companies, establishes that export duties may be progressive according to the international price.

Source: Ambito

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