The Argentine government is actively campaigning to establish a working group with Chile and Bolivia to develop resources and advance the creation of a value chain for this metal, Argentina’s Undersecretary of Mining, Fernanda Ávila, told Bloomberg. The ultimate goal is to eventually manufacture lithium batteries for electric vehicles in the region. Two Chinese companies, Ganfeng Lithium and Gotion High-tech, have expressed interest in setting up battery factories in Argentina.

The initiative makes sense, given that Argentina has an well-established . Although smaller than those in Mexico or Brazil, Argentina manufactures about half a million units a year, including light-duty and utility vehicles. Half of these are destined for the export market, with Brazil as its main customer.

In an effort to promote the electrification of the sector, the administration of President Alberto Fernández sent to the Congress a controversial legislative proposal that, among other things, will ban the sale of internal-combustion vehicles in the country starting in 2041. 

The formation of this working group with Chile and Bolivia is in its preliminary stages. It aims to replicate the agreement between the three provinces in Argentina with potential for lithium production—Jujuy, Salta, and Catamarca—to ensure support for investments in lithium production.

Chile, Bolivia, and Argentina have different policies regarding lithium mining. Meanwhile, Bolivia is committed to developing the lithium mining industry through majority state ownership, in Chile the resource is considered strategic and is managed by the state development agency Corfo, which sets production quotas with lithium producers. The new administration of President Gabriel Boric has signaled its intention to create a state-owned lithium company.

Despite having the world's largest lithium reserves, Bolivia has not been able to begin commercial exploitation of the resource. Chile, on the other hand, is the world's second-largest producer.

Argentina, on the other hand, takes a much more liberal approach to lithium development. In agreement with the provinces that hold the largest deposits—Argentina is a federal country, and the provinces have a stake in the production of their natural resources—the country has been promoting private investment in lithium production. Although it has only two operational mines and a third that is set to begin production this year, in recent months several companies have announced plans to invest in lithium in Argentina. The list includes Britain’s Rio Tinto, Canada’s Lithium Americas, South Korea’s Posco, and China’s Zijin. Against this backdrop, analysts expect Argentina’s lithium production to grow significantly in the coming years

Countries with the largest lithium reserves (mineral resources in millions of metric tons)

Source: U.S. Geological Survey