Florencia Barragan 
Despite Congress’ inactivity in an election year, the government confirms they will send a bill with a lithium strategy. However, they rule out that it will have the same features as Chile’s legislation, which promotes the nationalization of lithium and government exploitation of the mineral. The strategy in the works by the government and the three mining provinces (Catamarca, Salta, and Jujuy) is to promote industrialization, so there is a debate these days about quotas and preferential prices for the domestic market.
Last week, Casa Rosada officials anticipated a few decisions. The secretary of Strategic Affairs, Mercedes Marcó del Pont, said the “development of lithium is an opportunity to strengthen industrialization” during an event organized by the National Federation of University Professors (CONADU, by its Spanish initials).
“Our government cannot end without enabling a discussion about regulatory frameworks that secure the availability of a lithium quota for its Argentine industrialization,” she said regarding the details of the project.
Domestic quota
According to information obtained by the Herald’s sister title Ámbito, the bill has a chapter that creates a domestic market quota to ensure a supply of lithium for industrialization. It also states that it must have a preferential price. Government sources say the quotas will stand as long as “there is local demand”. The percentage of this quota is undefined as yet, but may start at 5%.
Also, these days they are trying to define the institutionalization of the local quota’s marketing. This is the point where Argentina’s lithium strategy will match Chile’s. The neighboring country has the state agency Corfo (Production Promotion Corporation). Last April, Corfo finished an evaluation that lasted a semester and established an 11,000-tonne annual quota of lithium carbonate at a preferential price for the company BYD Chile, which will build a cathode plant and create 500 jobs.
What Argentina and Chile share is the notion of promoting added value. But Argentina hasn’t yet defined the nature of an entity similar to Corfo, including the procedures for transparent price mechanisms and allocations. In Chile, Corfo opened a call in August 2022 to local and foreign companies to submit their added-value proposals and thus obtain a preferential price. The supply will be provided by the mining company SQM Chile, one of the two corporations that exploit lithium in Chile, through a contract between the company and Corfo.
After Chilean President Gabriel Boric announced the nationalization of the lithium industry, the Chilean government held meetings with SQM to renegotiate contracts and get the Chilean state to directly participate in the extraction and production of the mineral. They still haven’t met with Albemarle, the other company exploiting lithium. Chile’s plan is to create a state company similar to Codelco for copper. However, sources in the Argentine government clarify that the local strategy in this matter will be nothing like the Chilean one.
The bill is being drafted by Casa Rosada, the Economy Ministry, and the three mining provinces (Catamarca, Salta, and Jujuy). Sources with knowledge of the details say it doesn’t establish the nationalization of lithium or a state-run company like Chile. The regulatory framework doesn’t meddle with mining exploitation, which is currently conducted by three companies: Livent in Catamarca, Sales de Jujuy in Jujuy, and a new project that joined after seven years in Jujuy, by the Exar mining company. The closest thing to a “state strategy” will be the decisions of YPF oil company, which is mostly owned by the State, through its business unit YPF Lithium.
The differences with Chile had been publicly stated by the Undersecretary of Strategic Affairs Verónica Robert in a meeting with the University of Buenos Aires last week.
“Chile and Argentina are different countries from an institutional perspective: Chile is unitary, unlike our country, which is federal and acknowledges in its Constitution the original ownership of natural resources,” she said. In Argentina, nationalizing lithium would require a constitutional reform, because the natural resource is owned by the province, and that possibility is not on the agenda.
Cristina Kirchner’s request
Robert assured that the Chilean regulatory framework “allows us to think about Argentina’s actual chances and leverage.” In her view, regulations did not drive away investment after implementing mobile royalties that today amount to 40% due to the rise in the international price: “Corfo renegotiated contracts in 2015 with Michelle Bachelet, and they went from 100,000 to 200,000 tonnes, so it did not discourage mining companies from investing.”
In her May 25 speech, Vice President Cristina Kirchner called for a national lithium strategy. Although government sources confirm that the bill they are drafting will be sent to Congress “in the coming weeks”, some ministries have low expectations for it due to the proximity of the presidential elections, low levels of activity in Congress, and the weak provincial impetus. The Lithium Board, which gathers all interested parties, was scheduled to meet this Friday, June 16, but it may be suspended due to agenda issues raised by provincial governments.
