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Argentina considers OPEC-like deal for lithium

By Agence France-Presse
Thursday, June 30, 2011 20:20 EDT
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BUENOS AIRES — Argentina is promoting the idea of an OPEC-like cartel for itself, Bolivia and Chile, which together control 85 percent of the world’s reserves of lithium, a key component in electric car batteries.

“In the near future and with our production at such a high level, Bolivia, Argentina and Chile will control the lithium market,” said Rodolfo Tecchi, the director of the technology and science promotion division of the Argentine Ministry of Science and Technology.

“They could do it with a sort of OPEC-like arrangement,” he added.

The three countries, which Forbes magazine calls the “Saudi Arabia of lithium,” would establish “control mechanisms for the sale of lithium carbonate, avoiding the lower prices that come with overproduction,” he added, an idea at the heart of OPEC’s operations.

Not everyone in the industry agrees, including the head of the Argentina chamber of mining industries in the province of Salta, Facundo Huidobro.

“The idea is a bit premature,” said Huidobro. “We have to make sure that investments have been made.”

Salta, along with the northern provinces of Jujuy and Catamarca, contain Argentina’s largest lithium deposits.

Argentina has about 10 percent of the world’s reserves, after Chile, with 25 percent in Atacama, in the north of the country, and Bolivia, which holds about half the world’s supply in Uyuni, the world’s largest salt flat.

Sales of lithium by Chile, on the other hand, represent 44 percent of worldwide revenue, followed by Australia, with 25 percent, China with 13 percent and Argentina with 11 percent.

A ton of lithium, worth $2,500 in 2004, now sells for around $6,000.

While lithium is also used for cellphone and computer batteries, experts expect its greatest use will be in electric cars.

Last year Bolivia announced a $900 million (628 million euro) investment for lithium in three phases: production of lithium carbonate, then metallic lithium and finally, after 2014, lithium batteries.

In Argentina, Sales Jujuy, which belongs to the Australian company Orocobre and is associated with automaker Toyota, just received the go-ahead to mine lithium and potassium.

Several other companies are exploring Argentina’s lithium-mining areas, including the Canadian Lithium Americas, the Australian Ady Resources and the French company Bollore et Eramet.

Agence France-Presse
Agence France-Presse
AFP journalists cover wars, conflicts, politics, science, health, the environment, technology, fashion, entertainment, the offbeat, sports and a whole lot more in text, photographs, video, graphics and online.
 
 
 
 
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