Tue, Mar 07, 2023 page10

• S America steps up efforts to make lithium batteries

  • Bloomberg
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  South American nations are stepping up efforts to propel themselves further down the electric vehicle (EV) supply chain by leveraging their vast mineral wealth, expanding processing capacity and targeting vehicle manufacturing.

  Argentina, Chile, Bolivia and Brazil plan to coordinate action on turning more of the region’s mined lithium into battery chemicals, as well as moving into manufacturing of batteries and EVs, Argentine Mining Undersecretary Fernanda Avila said.

  The drive across the key producing regions of South America reflects a burgeoning global trend by resource-rich nations to chart a course away from merely supplying raw materials into higher-value activities to boost growth, raise incomes and make the most of their resource endowments.

  

  Argentine Mining Undersecretary Fernanda Avila speaks at the Prospectors and Developers Association of Canada Convention in Toronto on Sunday.

  Photo: Bloomberg

  In Asia, commodity powerhouse Indonesia has laid out its ambition to become a global battery hub for electric vehicles as demand for greener transport skyrockets.

  “We have to prepare ourselves for what’s coming and be able to adapt — beginning perhaps with cells, working toward industrialization and getting to batteries,” Avila said in an interview from Toronto, where she is part of the Argentine delegation presenting at the annual Prospectors and Developers Association of Canada Convention.

  The so-called lithium triangle of Argentina, Chile and Bolivia accounts for more than half of global lithium resources, and Brazil and Argentina have automaking experience.

  That could be the basis of a regional electro-mobility platform, she said.

  So far, South America has seen limited success moving into higher-value lithium products — let alone making batteries or EVs on a commercial scale.

  However, political will, technological shifts and geopolitical tensions might aid their push.

  Russia’s invasion of Ukraine and concerns over China’s dominance of key parts of the supply chain are accelerating the splintering of traditional trade ties and spurring efforts to foster local industries, especially those involved in the energy transition.

  The US’ Inflation Reduction Act (IRA), which US President Joe Biden signed into law in August last year, is pushing EV makers globally to produce more vehicles in North America and secure the key minerals for them outside of China, in particular in nations with free-trade agreements with the US such as Chile and Australia.

  Argentina is presenting its case for IRA inclusion, despite not having a free-trade agreement with the US.

  However, the focus is on adding value at home, Avila said.

  The country has set up a working group with its three main lithium-mining provinces, recently broadening the scope by adding other government entities and private-sector representatives.

  The group has started to discuss setting aside quotas of lithium for domestic use, prices for which would probably be tied to the market, “but in some way preferential,” she said.

  China’s Chery Automobile Co (奇瑞汽車) wants to build a US$400 million EV and battery plant in Argentina amid a rush into Andean lithium supplies.

  Jujuy, one of three lithium-producing areas of Argentina, is in talks with a company from China to make battery cathodes in the province, Jujuy Governor Gerardo Morales has said.

  Jujuy is also working on a broader provincial framework featuring tax cuts to lure investments.

  The idea is to lay the groundwork for making batteries locally, with China’s Ganfeng Lithium Co (贛鋒鋰業) and Gotion High-tech Co (國軒高科股) expressing a willingness to help.

  There is also a lot of interest from European, Asian and US companies, Avila said.

  “Adding value is central for us,” she said. “We know the industry today is growing and there’s a lot of pressure and price volatility. But it’s about making the most of this window of opportunity, not just by shipping out lithium carbonate.”
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