At a global level, the shift towards electromobility as a means of reducing emissions and mitigating climate change is undeniable. However, the focus on this transition is also influenced by public policies that promote it and the availability of critical inputs for manufacturing the main components of electric vehicles.
When discussing electromobility, it is common to reference only electric cars, where the battery, one of its key components, relies on lithium products. However, electromobility encompasses a much broader ecosystem that includes not just transportation but also infrastructure. Copper emerges as a critical and irreplaceable mineral in this field. Along with lithium, nickel, cobalt, and rare earths are also essential components of many fast-growing clean energy technologies such as wind turbines and power grids.
Despite its potential in this field, Argentina has faced challenges such as economic instability and long-term policy inconsistency that have hindered the development of large-scale mining projects. Even though there are currently 17 mining projects operating in Argentina, including three lithium projects, uncertainty around regulations and investment decisions has slowed down progress in this area. In addition to macroeconomic factors that affect investment decisions regarding large-scale mining projects like lithium mines, the lack of infrastructure development remains a significant obstacle to growth in this sector.
While challenges remain high, recent developments indicate a gradual but sustained growth path for lithium production in Argentina. With six projects under construction that will expand supply by more than 100K tons of different lithium products by 2024 (though still below Chile’s production), lithium’s participation in Argentina’s total mining exports has increased from 1% to 18% over ten years.
On the other hand, copper exploitation in Argentina faces significant challenges despite having world-class deposits and important reserves. Since Minera Alumbrera closed operations in 2018 without participating in the copper market even though it had significant reserves and deposits worldwide. The main driver behind these large investments has been changes in rules governing resource extraction and ownership rights – even with the new Mining Investment Law – which have led to diversion of investments into traditional producing countries such as Chile or Peru. As a result, some promising copper projects have been delayed at various stages due to changes in regulatory conditions affecting investment decisions related to these resources.
Despite these setbacks, several international players are now setting foot in Argentina for medium-term plans related to copper production across multiple sites like Josemaría (SJ), El Pachón (SJ), Mara (Catamarca) and Taca Taca (Salta). These investments could exceed USD $12 billion over time if they come to fruition.