Lithium Boom Propels Argentina’s Mining Sector to 9.7% Growth
During the first four months of the year, the mining sector grew by 9.7% compared to the same period last year, though not all branches performed equally. Lithium emerged as the standout, achieving significant improvements over the rest of the industry.
A report from the National Institute of Statistics and Census (Indec) revealed that lithium carbonate and other lithium minerals saw a 40.6% improvement in April and a 49.7% increase in the first four months of the year. This impressive result is partly due to the high price of lithium at the beginning of the year. Lithium carbonate and hydroxide products averaged above $20,000 per ton in the first quarter, up from the $13,000 floor reported by the Secretariat of Mining at the end of 2023. This price remains well above the production cost of around $4,000 per ton, indicating a substantial profit margin for lithium extraction.
The rise in lithium extraction is also driven by increasing demand and its future potential. Lithium is crucial for manufacturing ion batteries, and global demand is surging due to the electric vehicle boom and the transition to renewable energies.
The future of mining in Argentina appears promising, especially for lithium. The growing global demand, fueled by the energy transition and the electric vehicle industry, suggests a period of expansion. With three projects in production and 35 in various stages of progress, Argentina currently leads the world in lithium exploration investment, according to S&P Global Intelligence.
A CRU study indicates that lithium production could grow by 50% annually until 2027. Argentina has the potential to become the world's second or third largest lithium producer, surpassing China and possibly Chile, which are currently the third and second largest producers, respectively.
Other branches of the mining industry also saw growth. Salt extraction improved by 52.7%, with "brine or saturated salt solution" growing by 61.7%. Crude oil and natural gas production increased by 10.7%, according to Indec data. Non-metallic minerals and application rocks rose by 7.2%, and the "exploitation and agglomeration of peat coal and exploitation of mines and quarries" increased by 46%.
However, not all mining branches fared well. The extraction of metalliferous minerals dropped by 2%, ornamental rocks fell by 24.4%, limestone and gypsum production decreased by 14.4%, and the extraction of sand, pebbles, and crushed stone declined by 3.8%. The extraction of clay and kaolin also saw a decrease of 19.7%.
