Business groups have called on La Rioja provincial government not to pass a law declaring lithium a strategic resource and suspending exploration permits. The dispute reflects broader debates on extraction models and the role the state should play in the Argentine lithium industry.

Lithium law 10.608 was approved by La Rioja’s provincial chamber of deputies on December 15, but has not yet been published in the official bulletin. It declares lithium a strategic natural resource because of its socioeconomic importance in the province and suspends exploration permits and concessions for 120 days, a period which the government can extend once.

The Argentine Industrial Union (UIA) said the development of the country’s lithium industry required laws that “offer long-term predictability” and that the law “goes against the opportunities Argentina has in the fields of energy transition, federal development, creation of formal work, and generation of currency [income] through exports”.

Likewise, the Argentine Construction Chamber (CAMARCO) expressed “profound concern” over the law, stating that the implementation of the law would “generate serious harm for the local mining industry”.

La Rioja governor Ricardo Quintela, of the Justicialist party (the main party in the Frente de Todos ruling coalition), said on Thursday in an interview with AM750 radio station: “We’ve made all the licenses expire and go back to being state property. The province is in a position to do the exploration and then invite all the companies that want to invest, but only as long as it favors the people of La Rioja, the country, and the companies too.” 

Lithium is important for the production of batteries, and as the world seeks to replace gas-powered vehicles, demand is surging. Argentina, Chile and Bolivia are home to around 50 million tonnes of lithium resources, studies by the US Geological Survey show, and the provinces surrounding the tri-border region are known as South America’s lithium triangle. 

Lithium policy in the three countries varies widely: Bolivia is pursuing industrialization via state-private partnerships and Chile considers it a strategic resource, but in Argentina, a series of existing laws currently mean the state receives minimal revenues from the private companies extracting it.

The Economy Ministry estimates that Argentine lithium exports were around 27,500 tons in 2022, valued at around US$700 million – substantially less than Chile, which shipped over 186,000 tons in the same year. However, Bolivia, where a number of false starts and infrastructural challenges mean the industry has yet to get off the ground, exported only a nominal volume of around 480 tons.