State company Y-TEC, the tech arm of YPF, will open the first lithium battery cell factory in September, in La Plata, the capital of Buenos Aires province. Another plant, five times bigger, will kick off in Santiago del Estero in 2024.
“We want to position ourselves as region leaders in lithium industrialization,” said Roberto Salvarezza, president of Y-TEC and YPF Litio. The companies are carrying out three projects to develop local providers, and they expect 50% of each battery to be locally made.
The lithium batteries’ cell manufacturing plant in Berisso, La Plata, will open in September, an event top government officials are expected to attend. The plant will generate 15 megawatts per year, which means it will produce lithium batteries capable of powering 2500 households.
The batteries are envisaged for use in rural areas. For example, there is already a Buenos Aires province-backed project to supply the Paulino-Berisso island, home to 70 families who are currently off the power grid. Three hundred solar panels will be installed to produce energy that will be stored in the batteries.
Salvarezza also said that major renewable energy companies are already contacting them to install lithium batteries in their wind and solar farms, since the electrical power grid is saturated. Lithium batteries would thus be a way to store energy until it’s ready for distribution.
The Santiago del Estero plant, scheduled to open in 2024, is quite different. Still under construction — although US$10 million has already been invested to purchase equipment — it will be five times bigger, generating 75 megawatts per year, enough to produce batteries capable of powering 10,000 households, or 2000 vehicles.
The goal is to move into the electric vehicle market. “Companies that make electric motorcycles and buses, auto manufacturers, as well as the armed forces, have asked when the batteries will be ready,” said Salvarezza
When asked whether the goal is to export, the former Science Minister said the current aim is to “supply local demand” and then target the region. “In Argentina we have some advantages compared with other places. We have car manufacturers and lithium. Chile has lithium, but not an automotive industry, while Brazil has a [car] industry but hasn’t exploited its lithium yet. We need to become the country that provides batteries to the region.”
Salvarezza, however, is also following what’s happening in the region in order to prevent Argentina from falling behind. Chile has chosen Byd, the world’s largest manufacturer of electric cars, to design a project to produce 50,000 tons of LFP-type cathodic material, which is a part of the battery. Byd has also just purchased Ford’s former Brazil factory to produce electric cars.
“Our neighbors are pushing us to move faster,” he said.
Regarding production competitiveness, Salvarezza recalls the case of Vaca Muerta. “When we started, it was also more expensive than in the US. But there was a learning curve, perseverance and partnerships with private companies, such as Chevron. Here, we are also considering all kinds of strategies,” he explained.
Y-TEC contract with Livent
There is yet another factor Salvarezza believes will contribute to competitiveness. “We are going to be more competitive once we manage to scale up production and increase integration of national inputs. But you don’t learn everything until you start producing”. Therefore, they are carrying out three projects to develop local suppliers.
In the case of lithium, Y-TEC signed a contract with American company Livent, which extracts the mineral in Catamarca and, for the first time, sold part of its production in Argentina. According to Salvarezza, for industrialization to grow in scale, part of the production ought to be sold on the local market.
The chosen battery technology is the so-called LFP (since it contains iron, or ferrum, lithium and phosphate) that allows for a greater level of local and regional integration. “LFP represents 30% of battery cost. It’s true that it uses a little bit of lithium, but that’s the most expensive part. A tonne of lithium can cost over US$30,000, and it’s in Argentina. Meanwhile, the tonne of iron and the phosphate must be imported, but you can get them in the region, and their cost doesn’t add up to more than US$3,000 per tonne. In fact, they are already being sold in Argentina to the steel industry and farming,” said Salvarezza, who added that they chose this technology because “it’s safer and less polluting”, and also the same one used by brands like Tesla, Ford, or General Motors.
Although the first batch of batteries required LFP be imported, a local pilot LFP plant will open in October at the Y-TEC La Plata branch. They will produce 30 tonnes per year to supply cell production. In addition, Y-TEC is in negotiations with a Chinese company to produce 60,000 tonnes of LFP in a new Catamarca plant. Although LFP is only a fraction of the battery, it implies a larger industrialization process than the lithium carbonate that is currently exported. This is a market currently worth US$10 billion globally, and is expected to reach US$50 billion by 2028.
Y-TEC’s aim is to include local providers. “Fifty percent of battery cost could be covered by using local inputs,” said Salvarezza. For example, the aluminum layers that go inside the battery. The Y-TEC head was recently in Puerto Madryn at the Argentina company Aluar.
“We haven’t sign any contracts, but both parties are interested in doing so,” he said.
Graphite is another case, as it is a key material for the anode part of a battery. Although it is not manufactured in Argentina, Y-TEC is conducting a project for artificial graphite production, using burnt coking coal from the YPF refinery. They took it to the Spain Carbon Institute to see if they could perform a chemical process on it. “We tested it and it works, now we’re looking for companies that want to develop that process here”, Salvarezza explained.
And finally, there is the electrolytes project, which is another element in a battery. The Atomic Energy Commision has started producing it on a lab scale. The problem is that, while some materials can be obtained locally, like propylene in the case of separators, other inputs, such as copper,still need to be imported.
Lithium after the elections
Regarding the future of these projects in the event of a new government, Salvarezza said he hopes the next administration maintains institutional responsibility, since universities like the University of La Plata are also part of the project. The same goes for provinces where the current administrations will continue in power, like Santiago del Estero. “In Vaca Muerta, the previous government did not back down, we hope these projects continue, we would like to hear what kind of development models the opposition has,” he said.
According to him, what could actually hinder the scale of local industrialization is, paradoxically, lithium provision. The Frente de Todos (the former name of the ruling coalition Unión por la Patria) intended to pass a bill that established local market quotas for mining companies at a preferential rate. The bill never made it to Congress.
“Without a framework that guarantees lithium, it will be difficult to grow in scale, since you don’t know if people will want to sell it to you because the companies have already signed contracts with countries that want to produce the batteries, such as China, the United States, and the European Union.”