INTERVIEW: Lithium Argentina VP sees partnerships, patience as keys to long-term growth

Lithium Argentina is focusing on operational efficiency, cost management and international partnerships to ride out weak prices while it develops new projects to meet long-term demand growth, Executive Vice President Ignacio Celorrio told S&P Global Commodity Insights in a recent interview.

A lithium “price recovery will not be swift, but there is a general consensus that it will occur,” Celorrio said on the sidelines of the Lithium South America event, in Jujuy, Argentina, on Oct. 9-10. The event drew over 1,500 attendees, and Celorrio chaired the honorary committee.

Platts, part of S&P Global Commodity Insights, assessed battery-grade lithium carbonate at $10,200 per metric ton CIF North Asia on Oct. 15, down 32% since the start of 2024. The first-ever daily Lithium Triangle (LiT) spot assessment(opens in a new tab) for South American lithium carbonate was assessed at $9,800/mt FOB on Oct. 14, down 20% since it launched Sept. 2.

Celorrio said pricing will be key to determining the feasibility of new lithium projects.

“While existing operations can remain profitable, the outlook for new ventures is clouded by economic uncertainties," he said. "If the situation remains as it is now, financing new projects in this environment will be much more difficult."

Strong growth potential

Argentina holds the world's largest aggregate lithium in reserves and resources at 67.7 million metric tons, according to S&P Global Market Intelligence data.

It is expected to quickly increase its lithium output compared to other countries in the Lithium Triangle, owing to a robust pipeline of upcoming projects and an openness to investors. Argentina has at least 60 lithium projects underway, including four currently operational and 20 in advanced stages, while Chile has 19 projects in total, with three operational and six in advanced stages, according to S&P Global Commodity Insights data.

Celorrio stressed the importance of partnerships in overcoming the challenges presented by market volatility and low prices.

“Collaborations with established companies like Ganfeng have proven essential for growth, particularly in successful projects such as Cauchari,” he said

In partnership with Ganfeng Lithium, the company is ramping up production at the Cauchari-Olaroz lithium brine operation in Jujuy Province, northwest Argentina, and investing in two additional projects: Pastos Grandes and Sal de la Puna.

“While Argentina is rich in resources, development has been inconsistent, presenting both challenges and opportunities for startups and established firms alike," Celorrio said. "Therefore, it is crucial for us to partner with strong companies in the sector.”

When asked about partnerships with other companies in the region focused on sharing infrastructure, Celorrio pointed out that mining has a poor reputation for collaboration.

“The reality is that this perspective must change quickly, especially with lithium, given that all the projects are located within a specific geographic area," he said.

“The national government has made it clear that it lacks sufficient funds for public works. There are ample legal frameworks to facilitate public-private partnerships that can benefit multiple projects simultaneously,” he added.

Celorrio said the miner is keeping a close eye on what specification of lithium carbonate that customers require. Currently, Lithium Argentina produces lithium carbonate with a purity around 99.5%, but “we are also conducting extensive quality analyses and process optimizations to enhance plant performance, aligning our plans for battery-grade production with market trends.”

Long-term demand

As the world transitions towards renewable energy and electromobility, Argentina's lithium resources will be vital to support this shift. Commodity Insights data shows the country produced 47,161 metric tons of lithium carbonate equivalent in 2023, and it has the potential to increase that by almost six times by 2028.

At the Cauchari-Olaroz project alone, the production plan aims for up to 25,000 metric tons of lithium carbonate in 2024. Celorrio said the operation is expected to reach its full capacity of 40,000 metric tons by 2026, with an estimated mine lifespan of 40 years.

“Our top three priorities are the efficient operation of Cauchari-Olaroz," he said. "I don't believe the market is ready for significant capital expenditure announcements just yet. With a modest market recovery, these plans will progress further."

Regarding Argentina's large investment incentive regime, known as RIGI, which offers major investors tax breaks and currency exchange benefits, Celorrio emphasized that many projects “would not have the opportunity to advance without a stable regime in place, as it mitigates a substantial portion of the risk.”