Chile, Argentina and the lithium value chain: How far should they go?
Chile and Argentina have more than 60% of the lithium reserves worldwide and no one doubts the value that this resource will add to the exports of both countries. But, unlike the debate that is generated around other raw materials, in the case of lithium not everyone agrees that producing countries in Latin America must climb high in the value chain.
Should Argentina and Chile be involved in the production of lithium cathodes, electric batteries or electric cars?
This was one of the topics that was discussed in the seminar Lithium: Regulation, market and technology that was held this week at the Expomin fair in Santiago. Authorities from the mining sector and representatives of large lithium production companies such as Albemarle and Posco talked about this and other issues.
Daniel Melián, Argentina's mining secretary, told BNamericas: "All that we believe is 'blowing and making a bottle' (as simple as it seems) is not so easy, all those who are doing these technologies have 30 years with technologists working on it, we don't have half a year of technologists working on anything, so you cannot pretend to do the Tesla car."
In that sense, the official explained that unlike Chile, in Argentina lithium does not have a strategic character. "We leave the market open, we don't condition or force anyone to invest in technology, we believe that we have to have the best players in the field and these players are going to do the technological development," said Melián.
He said that a year ago the ministry opened a research and development center in the province of Jujuy with national oil company YPF and the Argentine geological mining service where new technologies are being developed. "But we do not have the expertise because this expertise has already been gained by people who have known this for a long time," said Melián.
Eduardo Bitrán, former vice president of Chilean state development agency Corfo and an academic at the Adolfo Ibáñez University, said the added value of lithium in Chile is through the signing of contracts with SQM and Albemarle where 25% of production will be offered at a preferential price to those companies willing to add value in the country.
"I don't see advantages for Chile of starting to build batteries, or electric cars, but in the early stages of development [of lithium]," Bitran said.
Pablo Terrazas, Chile's mining undersecretary, told BNamericas that attracting a value-added industry is one of the mining ministry's priorities.
In January three companies were selected within the framework of the call made by Corfo to add value to lithium: Molymet, Sichuam Fulin Industrial Group and the consortium formed by Samsung-Posco.
"These projects seek the manufacture of cathodes and involve an investment of US$754mn and more than 650 jobs, which goes in line with our objective: for mining to move from the exploitation of natural resources to a knowledge-based economy" said Terrazas.
Stebpen Elgueta, general manager of Albemarle Chile, told BNamericas that the US company is adding to the value chain that Corfo encouraged by designing products for the industry to flourish. "In future, we do not intend to integrate vertically, we are very happy in the place we are and we believe that the agreements with the Chilean state have allowed that added value and those competitive advantages to occur," said Elgueta.
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