How global carmakers are investing in Argentina's lithium potential

The goal for automakers to comply with the European Union’s requirement for new cars and vans to have zero CO2 emissions from 2035 is putting Argentina firmly on the global lithium map.

Argentina has major lithium reserves in Salta, Jujuy and Catamarca provinces and the government is implementing initiatives to attract foreign investments.

“Argentina is now the fourth largest lithium producer in the world, with lithium carbonate equivalent [LCE] projections increasing from the current 37,500t/y to 246,500t/y by 2030,” mining minister Fernanda Ávila told BNamericas.

Ford and General Motors are among the world's leading automotive companies that have recently announced investments in Argentina, joining previous plans revealed by BMW and Toyota.

The global automotive battery market is projected to grow from US$45bn in 2021 to US$65bn in 2028, according to a Fortune Business Insights report. Electric vehicle battery demand is also forecast to increase from around 340GWh today to more than 3,500GWh by 2030, says the International Energy Agency (IEA).

FORD

Ford has sourced 70% of its battery inputs to reach its targeted annual production rate of 600,000 electric vehicles (EV) worldwide by late 2023 and more than 2mn by the end of 2026, it said in a release. 

To do that, Ford has closed several key lithium agreements, including a non-binding MOU with global mining group Rio Tinto to jointly develop supply chains for battery and low-carbon materials for its EVs. 

The two companies will supply lithium from Rio Tinto’s Rincón project in Salta province. The project was acquired by Rio Tinto for Aus$835mn (US$582mn) in March and it will invest Aus$190mn in a battery-grade lithium carbonate plant with capacity of 3,000t/y, to be marketed by 2024.

Ford, meanwhile, signed a non-binding offtake agreement with Australian lithium producer Lake Resources for 25,000t/y of battery-grade lithium carbonate from the Kachi project in the Salar Carachi Pampa in Catamarca province.  

The feasibility study carried out earlier this year indicated that production will increase to 50,000t/y of LCE.

Kachi’s studies also indicated 4.4Mt of LCE resources, making it one of the world's top 10 brine deposits. 

Ford’s electric vehicle sales increased 169% in July compared with the same month of last year and the carmaker plans to invest over US$50bn in EVs through 2026.

GENERAL MOTORS

General Motors reached a six-year agreement with lithium technology company Livent to source lithium hydroxide by 2025 from brines at the Fénix site at Salar del Hombre Muerto, also in Catamarca. 

Livent’s lithium carbonate production capacity is 20,000t/y, with an additional 9,000t/y of lithium chloride. The company plans an expansion to reach capacity of 30,000t/y of carbonate from 2025 and also expects to reach capacity of 100,000t/y of lithium carbonate production by the end of 2030.

GM will pay US$198mn to see Livent supply lithium hydroxide starting in 2025 and feed its plans to produce 1mn EVs annually in North America from the same year. 

Philadelphia-based Livent also has international agreements with carmakers Tesla and BMW.

BMW 

In March 2021 the German carmaker reached a deal with Livent to source lithium for battery cells, through a multi-year contract worth 285mn euros (around US$350mn). Livent will be responsible for supplying the extracted lithium directly to BMW group’s battery cell manufacturers starting this year.

BMW more than doubled its sales of fully electric vehicles worldwide in Q1 compared with the same period of last year.

By the end of 2025, the company aims to have more than 2mn EVs on the roads and by 2030, at least half of BMW's global sales are expected to be EVs, reaching a total of 10mn in 10 years, it said last year in a release. 

TOYOTA

In 2010, Japanese trading company Toyota Tsusho Corporation (TTC) became part of the Salar de Olaroz joint venture between Australia’s Orocobre (now Allkem) and Argentine provincial mining investment company Jujuy Energía y Minería Sociedad del Estado (JEMSE) to produce 10,000t/y of lithium carbonate as raw material for lithium hydroxide.

Part of the agreement to develop the Olaroz lithium facility included the foundation of Sales de Jujuy as the local operating company. Currently, 22 evaporation ponds and eight concentration ponds are either being constructed or already operating, aiming to add 25,000t/y of lithium carbonate output.  

Production at Olaroz reached a record 12,863t of lithium carbonate in fiscal year 2022, 47% of which was battery-grade material, Allkem said in its latest quarterly report. 

Allkem (75%) and TTC (25%) also constructed a plant in Naraha, Fukushima prefecture in northeast Japan to convert lithium carbonate into lithium hydroxide for Li-ion batteries. The lithium carbonate feedstock of 9,500t/y will be shipped from Olaroz and is targeted to produce 10,000t/y of lithium hydroxide. 

Photo credit: Toyotsu Lithium Corporation 

LITHIUM MARKET

Lithium supply is forecast to reach 636,000t of LCE in 2022, up from 497,000t in 2021. Demand is predicted to be 641,000t of LCE this year, up from an estimated 504,000t in 2021, said S&P Global.  

By 2030, demand is projected to reach 2.4Mt LCE compared with 600,000t of lithium forecast to be produced in 2022, according to Benchmark Minerals Intelligence. The lithium industry needs US$42bn of investment by 2028 to meet the projected demand, it added. 

And around 2bn electric vehicles need to be on the road by 2050 for the world to reach the net zero targets, says the IEA.