It is estimated that the reserves of the three countries reach 50% of the global availability of the mineral that will be key to the energy transition. Although in terms of production, Australia leads the ranking by far, Chile appears in second place, Argentina in fourth place and for the moment Bolivia does not appear among the relevant actors.
According to official sources, Ambit, the negotiation is in the hands of Foreign Minister Santiago Cafiero, who works together with his peers Antonia Urrejola Noguera and Rogelio Mayta in a tripartite agreement that sets a common price for the sale of the mineral. The document would also include a “good practice manual” that addresses the issue of the activity’s impact on the environment.
At the same time, it seeks to agree on a floor of rules of the game so that the competition when it comes to attracting investment does not end up preying on the positive impact that the exploitation of the mineral can bring to the economies of the three countries. The complementary opportunities that may occur in the development of the value chain are also analyzed. All this is not an easy task because each country has its own internal legislation. Argentina, for example, has a federal governance regime for mining activity. This implies that the original domain of natural resources belongs to the provinces.
In dialogue with this medium, the researcher from the Natural Resources area of Fundar, Victor Delbuonoconsidered that “regional cooperation is extremely important in terms of transfer pricing because, based on the exchange of information in witness transactions that allow unrelated operations to be identified, the control policy can be strengthened and thus ensure adequate taxation according to the prices of the lithium market.
Argentine lithium exports during July and August were, for the first time, higher than those of silver and placed the mineral as the second most important in terms of generating foreign currency in the sector, behind gold. In the first eight months of 2022, lithium sales abroad reached US$394 million, with growth of 211% year-on-year. A large part of that jump was explained precisely by the price spike.
The discussion facing the Government becomes even more relevant when the projections for the coming years are analyzed, which mark an increase in demand driven by the energy transition. Lithium is an essential input for electric vehicle batteries and for renewable energy storage systems.
Source: Ambito
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