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Lithium, a soft, silvery-white metal known for its excellent electrical conductivity and reactivity, is crucial in the modern energy transition. It powers lithium-ion batteries, the backbone of electronics, electric vehicles (EVs), and renewable energy storage systems. As the global demand for clean energy rises, lithium has emerged as a vital mineral, enabling the shift towards net-zero emissions. In 2022, batteries accounted for 80% of the total demand for lithium, and this number is set to grow as the world continues its decarbonization efforts.

The Global Lithium Market

Lithium reserves are concentrated in a few key regions around the world. More than half of the world's estimated lithium resources are located in the salt flats of Bolivia, Chile, and Argentina—an area known as the "Lithium Triangle." Bolivia holds a significant portion of these resources but faces challenges due to sociopolitical factors. In contrast, Chile and Argentina, known for being more investor-friendly, hold first and third place, respectively, in global proven reserves. Australia, however, ranks second globally, with proven reserves of 6.2 million tonnes and leads in production with 61,000 tonnes produced in 2022.

Chile accounts for 40% of global lithium reserves with 9.3 million tonnes, while Argentina follows with 2.7 million tonnes, and China with 2 million tonnes. Canada holds 930,000 tonnes, making it the sixth-largest reserve globally.

Argentina’s Lithium Boom

Argentina has become a key player in the global lithium market, largely due to its vast lithium brine resources in the Andean region of the country. As of February 2024, Argentina ranks third globally in lithium reserves and is poised to significantly increase its output, driven by growing global demand for lithium, especially from the EV and renewable energy sectors.

Argentina Lithium & Energy Corp., a prominent player in Argentina’s lithium industry, is actively expanding its projects. Recently, the company completed geophysical surveys at its Don Fermin property, part of the Rincon West lithium project in Salta Province. These surveys revealed nearly 600 hectares of potential lithium brine aquifers, providing promising targets for a new six-hole drill program. The Rincon West project is located adjacent to the major Rio Tinto Rincon lithium project and is a key focus area for exploration.

Transient Electromagnetic (TEM) soundings were used during the surveys, covering 24.2 line-kilometers. These advanced geophysical methods detected conductive strata, indicative of lithium-bearing brines, at depths ranging from 200 to 1,200 meters. This discovery adds substantial promise to the country’s growing lithium sector, reinforcing Argentina's role as a significant lithium supplier.

Investment and Strategic Partnerships

Argentina's lithium potential has attracted substantial international investment. Automakers like Stellantis, a major player in the global auto industry, have invested in Argentina Lithium & Energy Corp., providing funding to advance exploration and resource delineation at the Rincon West and Antofalla North projects. Stellantis' investment highlights the increasing importance of securing reliable lithium supply chains as the demand for EVs grows. Global EV sales are projected to rise to 37 million units by 2030, driven by the push for sustainable transportation and the reduction of carbon emissions.

In addition to Stellantis, other major automakers such as Ford, General Motors, and BMW are seeking to establish strong lithium supply chains. Tesla’s interest in Argentina’s lithium reserves underscores the growing competition among automakers to secure raw materials for battery production.

Uses of Lithium

Lithium is critical not only for batteries but also for other industrial applications. It enhances the durability, corrosion resistance, and thermal resistance of glass and ceramics, making it an essential component in products like glass-ceramic stovetops, specialty glass, and fiberglass. Moreover, lithium contributes to improved energy savings and productivity in glass manufacturing processes, further underlining its diverse utility.

However, lithium demand's primary driver remains its energy storage role. Lithium-ion batteries, known for their high energy density and long lifespan, are the preferred choice for electric vehicles and grid storage. As global efforts to reduce greenhouse gas emissions intensify, the demand for lithium is expected to continue growing. The International Energy Agency projects that global electric car sales will reach 37 million units by 2030, with 226 million electric cars on the road globally. This transition will require a steady and reliable supply of lithium.

Future Outlook

Argentina's government has recognized the strategic importance of lithium for the nation's economy and the global energy transition. In response, it has taken measures to support the development of the domestic lithium industry, including the approval of new projects and investments. For example, the Argentine government has announced plans to invest up to $4.2 billion over the next three years to boost lithium output, with the goal of meeting the growing demand from the battery and EV sectors. Additionally, Argentina Lithium & Energy Corp.’s strategic partnership with Stellantis positions the company to capitalize on the surging demand for lithium.

The global lithium market is expected to continue expanding, with demand from e-mobility projected to increase from 582 kilotonnes of lithium carbonate equivalent (LCE) in 2023 to 1.87 million tonnes of LCE by 2028. As Argentina ramps up its lithium production, the country is set to play a pivotal role in meeting this demand, positioning itself as a key player in the global energy transition.

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