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Argentina Is Positioning Itself as a Mining Giant

Argentina Is Positioning Itself as a Mining Giant
In commodity circles, Argentina is known for its agricultural produce and for the Vaca Muerta shale play. But the country has recently started drawing attention to other kinds of natural resources: copper and lithium. According to some, it has a bright future as one of the world’s biggest transition minerals suppliers.
Two weeks ago, a local investment company, Integra Capital, struck a deal with Glencore to acquire its stake in a company called Volcan Compania Minera. According to Bloomberg, this is the second Glencore project the company has acquired in recent years. It is part of a strategy: building a metals and minerals portfolio in Argentina in anticipation of a mining boom driven by transition efforts.
Integra Capital is an investment vehicle owned by Jose Luis Manzano, who told Bloomberg in an interview, “We believe we are positioning ourselves in things that will be necessary for the next 50 to 100 years.”
In that, the Argentinian commodity investor echoes a sentiment that has become rather popular in investment circles. Copper and lithium are the focus of much forecasting attention as key transition minerals, alongside elements such as nickel and cobalt, used in batteries for EVs and storage. Argentina’s political circles have also been paying attention to the forecasts. Last year, Reuters reported that Argentina’s government had plans for copper mining projects that could produce 793,000 tons of the metal annually by the end of the decade. That would be quite something given that there is no copper production in Argentina at the moment—it would turn the country into one of the ten biggest copper producers in the world.
There are several copper projects in various, though early, development stages as miners stake their claims in the resource-rich country. Manzano’s buying spree now suggests there may well be something to it—as long as the forecasts materialize.
There are seven copper projects in progress in Argentina at the moment. According to BNAmericas, these could generate some $5 billion annually for the country’s budget once they start producing. The total output of the seven is seen at 1.2 million tons annually, per that report, which is considerably more than the estimate reported by Reuters. In total, Argentina’s copper reserves are estimated to be 44 million tons.
Yet copper is not the country’s only transition metal available in abundance. Argentina is also part of the so-called Lithium Triangle and is home to a third of the global reserves of the battery metal. Along with the other two “points” of the Triangle—Chile and Bolivia—Argentina accounts for as much as 70% of the world’s lithium, per Mining.com.
There are already a slew of companies developing Argentina’s lithium resources, with production last year hitting 9,600 tonnes. This appears set to grow in response to forecasts for growing demand, even though lately, these forecasts have become much less certain as demand for EVs weakens in many key markets. Even so, more lithium hopefuls are going to Argentina. Earlier this month, Reuters reported that an Emirati company planned to start producing battery-grade lithium at a rate of 5,000 tons in the country from 2027, raising this to 10,000 tons by the next year.
All these companies betting on Argentina’s mineral wealth got lucky last year when President Javier Milei came into power. The outspoken libertarian has eagerly promoted the country’s mineral wealth, and his policies should make it easier for miners to do business in the country by removing regulatory hurdles and establishing an investment-friendly environment. As long as demand lives up to forecast, Argentina could indeed become a major supplier for the energy transition.
By Irina Slav for Oilprice.com
May 24, 2024 18:43
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