The meeting was attended by the Secretary of Mining, Fernanda Avila, where what he did was present the potential that Argentina has. Although today it is second in the global ranking of greater resources, almost double that of Chile and Australia, in what has to do with reserves is only in third place, far behind Australia and Chilemain producers.
The meeting is seen from the Ministry of Economy, headed by Sergio Massa, as a “wink” from the United States to deepen trade relations with Argentina. It is that the government of Joe Biden will implement the Inflation Reduction Act, a historic plan of US $ 400,000 million, which has electromobility as one of its chapters.
The law known as IRA (for its acronym The Inflation Reduction Act) provides subsidies for the purchase of electric vehiclesTherefore, an exponential jump in the country is expected in the demand for lithium to supply the industry. However, the subsidies will be for the manufacture of vehicles that have resources from the United States, or from countries with which it has a free trade agreement. That’s where Argentina could be out of businessand that is precisely the exception that the United States seeks to make with these approaches.
The initiative called Minerals Security Partners MSP is a collaboration led by the United States and formed by 13 powers in June last year. In the first meeting, held this Thursday, they decided to invite Argentina. “They could have invited a mining country like Chile, but they decided that the Argentine government should participate”commented an official source, to give relevance to the meeting.
Australia, Canada, France, Germany, Japan, Finland, South Korea, Sweden, the United Kingdom, the United States and the European Commission are part of the MSP. During its formation, in the largest mining event in the world that took place last year in Canada, they assured that the objective is to achieve “critical mineral supply chains” as demand is projected to “expand significantly” in the coming decades for their essential use for clean energy.
The first meeting of the MSP association was held this Thursday virtually. Jose Fernandezundersecretary of economy, energy and environment of the United States Department of State, described the meeting as “productive”, and indicated that they discussed the “potential projects” of Argentina in terms of critical minerals.
According to a statement published on the Treasury Department website, the invitation to Argentina was intended to “promote the objectives of the MSP” and discuss Argentina’s projects. “This meeting served to familiarize MSP partners and the private sector with the critical minerals sector in Argentina, and projects of potential interest for investment and support. Commitments like these help promote the transition to clean energy, further mobilizing resources to diversify mineral supply chains and advance the Biden Administration’s priority of regional collaboration to ensure responsible and sustainable minerals. .
Sources from the Ministry of Mining said that Ávila presented the potential of the sector, both to the member countries, and to companies that were also invited, among which were mining and automotive companies: Stellantis, BMW, Tesla, General Motors, Panasonic, Rio Red and Lake Resources. It is that although Argentina currently has only 2 productive lithium projects in operation, It has 6 under construction. The Wilson Center, a major US think tank, in its latest report on critical minerals projected that Argentina in 5 years could surpass Chile in lithium production.
Doubts for the dollar
After the presentation, Ávila was asked about the mining legal framework in Argentina, tax incentives and relations with communities. As she was able to learn this newspaper, there were no questions related to the lithium nationalization bills that are in Congress, but if a query about access to the dollar. Ávila replied that the exchange restrictions are temporary due to the problems in the balance of payments, and informed about the legal “tool” that can be used in these cases: decree 234, become the star of these daysgiven that it allows companies that invest more than US$100 million to have greater free access to foreign currency.
According to official sources, the fact that the IRA is put into practice and Argentina does not have a free trade agreement does not mean that the country will not be able to export more, but if by being left out of the enormous network of subsidies, it is likely that it will lose ground. in the market. For this reason, what is clear these days is that a way will be sought so that Argentina can participate in the IRA. In fact, the United States reached a special agreement with Japan on this issue, possibly soon with the European Union, and later with Argentina.
What is not clear these days is what form this bilateral agreement will take. At the annual event of the United States Chamber of Commerce (Amcham), the US ambassador, Mark Stanleyshowed that political support is: “Argentina will continue to be the main lithium exporter for the United States, we need to work on the IRA to make it applicable to Argentina”. In his turn, the Argentine ambassador to the United States, Jorge Arguello, replied that if “unlock issues”, the export of Argentine lithium could be multiplied by 5 or even 7.
In addition, an analysis that was made this Thursday in both the public and private sectors is that with the merger of the giants Allkem (Australia) and Livent (USA), which will become a single company valued at US$ s 10,600 million, It will mean that all of the lithium production in Argentina today will be made up of one company, based in the United States. “They are not going to be left out of their own business, if this is not unlocked by politics, the business lobby will unlock it,” read an important mining consultant.
Source: Ambito
