Lithium and copper investments could top $20 billion in the next decade, and mining to become one of the main export sectors of Argentina, due to the demand that these two minerals will have within the framework of the energy transition. However, the executives of the most important companies in the world warn that if the country does not make changes in the “rules of the game”, investments will continue to slow down.
These were some of the conclusions of the meeting held in Arminera, an international mega fair on mining that takes place from this Monday until Wednesday in La Rural. There, the businessmen of IDEA they joined the chamber of mining businessmen (CMEA) and organized a conference on the opportunities and challenges of the mining industry in Argentina.
One of the panels at the meeting was about the current situation of lithium and copper projects. On stage, in front of more than 100 executives, Alfredo Vitaller, VP of Corporate Affairs of the Josemaría copper projectrevealed the potential of copper in Argentina: “Our project has a capex of $4,000/$5,000 million, and generation of 8000 jobs in 4 years. The first 15 years we could export US$1.1 billion per year. But in addition, there are 5 other copper projects that in the They will have an investment of between US$15,000/US$20,000 million in the next 15 yearsand that when they are in operation they generate exports for US$ 15,000 million. Between copper, gold and lithium, mining is going to be one of the strongest sectors in Argentina”.
When starting his presentation, the first thing Vitaller mentioned is that the word that defines copper in Argentina is “future”. It is that, as he explained, this mineral serves to meet the global decarbonization needs, to reach zero emissions in 2050, due to the use of copper as the main transmitter of electricity. “All the mines in the world produce 26 million tons of copper per year. To reach the 2050 goal, by 2035, 50 million tons of copper will be needed. The United States already knows that there is going to be a deficit of 10 million tons. Argentina has an incredible window of opportunity, because it does not have to go out and sell, but rather it will have what the world is interested in.and change this dynamic that we depend on a single export sector”, he explained.
Currently, Argentina does not have any copper production projects. On this point, Vitaller commented: “There are 5 projects that could start in stages, 3 in San Juan, 1 in Catamarca and 1 in Salta, with which we could become the world’s top 10 copper production. But if they start at the same time, Argentina explodes, there is no infrastructure, manpower or energy”.
Conditions
“All that wonderful potential can be given, but with conditions, which are not present today. They are small changes that have to be made. For example, Canada is making an effort to lower taxes and attract investment. Here there are 4 issues to resolve, but they are not impossible”, Vitaller mentioned on stage.
After his presentation, Ámbito asked the representative of the Josemaría project what these obstacles are to begin with the disbursements of an investment that In that project alone, it could exceed US$5 billion. “For a year and a half we have been trying to reach agreements with the Nation and with the provinces. At the national level, access to the foreign exchange market. We already have the financing confirmed., but those who are going to lend us need guarantees,” he mentioned. Another of the points that he commented on is the reduction in withholdings, the return of VAT in a shorter period of time and the decrease in provincial taxes.
When asked when he thinks it will be resolved, he replied: “We should ask the national and provincial government, we have been trying to resolve it for almost 2 years. In Chile, when the copper withholdings changed, they sat down with the entire industry, here we all need to sit down, the public and private sectors at the same table, and outline a strategy”.
The Arminera meeting, where the most important mining companies in the world have stands, draws attention above all for its maximum security. You cannot enter the exhibition hall with a backpack, and a security group passed a scanner on each person. “We should have a beer soon” (in Spanish: “soon we should have a beer”) was one of the phrases heard in the corridors, given the presence of executives and embassy staff from different mining countries in the world, such as Canada and Australia.
Criticism of Chile
In any case, today the case of Chile is far from being a model to follow for the business community, due to the strategy of nationalization of lithium. In the panel on the local mining situation, Martín Pérez de Solay, managing director & CEO of Allkem, stated: “Chile today is an advantage for Argentina, in the last 5 years it has not generated investments in lithium, and Argentina is left with better conditions for investment to come.” Currently, the Australian Allkem (recently merged with the American Livent) are the only two lithium projects in Argentina, but there are 6 under construction and 3 in advanced stages, which could make the country the second global producer of lithium by 2030. .
Solay anticipated that lithium in Argentina will mean a market that grows 5 times in the next 7 years. However, despite the advantages that local geology presents, due to the concentration of lithium in the salt flats, and the demand for lithium in the world, Solay spoke that in addition to opportunities there are risks: “The lithium opportunity is not going to be eternal, it is a window of 30 years, we have a unique position, let us hope that there is no temptation to want to take out the fruit before the plant matures for short-term needs, because everyone wants to put the spoon in, and the uncertainty is permanent ”.
Little by little, mining ceases to be a niche sector. “Today all the candidates for president talk about mining, it is a very big step, what is missing is a roundtable on how to bring these opportunities to reality”assured from the stage Marcelo AlvarezExecutive Director of Government Affairs for South America of the company Barrick Gold.
In fact, for the first time, the business union IDEA joined the Arminera event. In dialogue with Ámbito, Daniel Gonzalezdirector of IDEA, revealed the entrepreneurial spirit that was lived in La Rural: “It is a parallel world, some call it islands, just as it happens with Vaca Muerta, it will also happen with mining, there is a climate of great future , but the full potential is not being used in its entirety”, he stated.
In fact, González revealed that in mining, neither the record inflation of 8% per month nor the exchange rate gap of more than 100% is seen. “I am not saying that it is not worrying, but the focus is on how the long-term conditions are created for these investments, which are gigantic. The largest investments, such as copper or LNG in energy, are on the shoulder waiting to see if they get on the road”.
Source: Ambito
