Argentina Lithium And Energy Emerging As A Lithium Exploration Powerhouse

The Rincon Salt Flat viewed from Argentina Lithium & Energy's Rincon West Project in Salta Province, Argentina.

• Argentina set to surpass Chile and Australia in lithium production states new stock exchange report.
• India signs new exploration lithium pact with Argentina as it ramps up production of electric vehicles.
• Argentina Lithium & Energy now funded to advance its core projects to the resource delineation stage with Stellantis investment.

Argentina’s lithium industry is gearing up for a dynamic 2024 as the South American nation is set to surpass Chile and Australia in lithium production within three years, states a new analysis from the country's Rosario Stock Exchange (RSE) as reported by the Buenos Aires Herald.

The report specifies the growth is being driven by the surging global demand for lithium, particularly for electric vehicle batteries and renewable energy storage systems.

"In a context where lithium production is expected to grow 8% annually in Chile and 16% in Australia by 2027, the average annual increase in Argentina aims to be 50%," said the report.

JPMorgan has also forecasted that Argentina would go from supplying 6% of the world’s lithium in 2021 to 16% by 2030, overtaking Chile as the No. 2 lithium producer in the world by 2027, behind only Australia reported.

"All eyes are on Argentina as the country progresses to become a top player in the global lithium market," said Miles Rideout, Vice President of Exploration for Argentina Lithium & Energy Corp. TSX.V: LIT, FSE: OAY3, OTC: PNXLF

Anticipating the growing demand for the critical battery metal from the salt brines or Salars of Argentina, the Vancouver-based exploration company recently signed a major deal with Stellantis N.V, one of the world's leading automakers. The US$90 million (in ARS$ peso equivalent) investment is a strategic and forward thinking move by Stellantis N.V. to secure potential supplies of lithium, said Rideout.

In return for their investment, Stellantis acquired a 19.9% stake in Argentina Lithium's Argentine subsidiary (convertible into a 19.9% stake of the parent company).

The deal also involves an offtake agreement that allows Peugeot Citroen Argentina S.A., a subsidiary of Stellantis N.V. ("Stellantis") to purchase up to 15,000 tonnes of potential future lithium production annually for seven years from Argentina Lithium's subsidiary, Argentina Litio y Energia S.A. ("ALE") — along with an option to extend.

"Automotive producers have huge requirements for lithium in the coming years. This deal reflects a forward-thinking approach by Stellantis," said Rideout. 

In addition, the global electric vehicle battery market size is expected to reach USD$198.9 billion by 2030, growing at a CAGR of 21.1% from 2023 to 2030. Increasing government initiatives for reducing carbon emissions and promoting the adoption of electric vehicles (EVs) drive the market growth, according to researchandmarkets.com.

Other automotive companies in Argentina's booming lithium play include Ford, General Motors and BMW, while Tesla's CEO Elon Musk has begun talks with Argentina’s new President Javier Milei, expressing interest in the country’s lithium reserves. Musk reportedly is keen on finding new, close-to-the-US sources of lithium concentrate to avoid supply bottlenecks. The company plans to begin operations at its battery production facility in Texas next year with a target to produce batteries for one million electric vehicles per annum.

Generating momentum across the company's portfolio of projects

Exploration drilling proceeds day and night, winter and summer.

Overseeing Argentina Lithium & Energy's ventures in South America is Miles Rideout, the company's Vice President of Exploration, who has directly managed the acquisition and exploration of dozens of lithium properties in northern Argentina. With more than three decades of experience in advanced exploration practice and mining integration with local communities and indigenous peoples, Rideout's deep expertise has been instrumental in the discovery of several world-class deposits in South America.

Argentina Lithium & Energy is also a member of the Grosso Group, a resource management team that is a pioneer in the mineral exploration industry of Argentina and has operated there since 1993. The Grosso Group's primary focus is on creating investor value by fostering the growth of its publicly listed member companies. These companies are involved in various aspects of mineral exploration and development, particularly in the fields of gold, silver, copper, uranium, vanadium, and lithium. 

Grosso Group companies have been involved with four exceptional mineral deposit discoveries in South America and have had past partnerships with industry majors such as Viceroy/Yamana, Barrick, Teck, Rio Tinto, Vale S.A., Areva/Orano and SSR Mining. Company Founder Joseph Grosso was named Argentina’s Mining Man of the Year 2005.

Argentina Lithium & Energy has four key projects, covering over 67,000 hectares of Argentina's portion of the Lithium Triangle, each with its unique prospects and strategic significance:

• Drilling at the 5,000+ hectare Rincon West Project to date has delineated an area of lithium enriched brines and drilling is ongoing; the property is located adjacent to the large Rio Tinto Rincon lithium project, acquired for USD$825 million
• The Antofalla North Project covers more than 10,000 hectares of mining claims
• The Pocitos Project where historic sampling in a very large and under-explored basin measuring approximately 60 km by 20 km has already returned lithium values
• The Incahuasi Project, another large basin of about 25,000 hectares, where Argentina Lithium has completed initial geophysical, surface sampling and drilling programs.

Rideout said the Stellantis deal has positioned Argentina Lithium to be funded to advance the two core projects toward the resource delineation stage over the next two years. "We are currently drilling our second major campaign on the Rincon West Project and expect preliminary results in the next few weeks while waiting for permits to begin work in the Antofalla North Project," he said.

"We expect the permits for Antofalla in Q2 this year and are looking at using two drills on the project, as it is quite a large area." The Antofalla North projects are located adjacent to properties held by global lithium producer Albemarle Corporation.

Alina Islam, a mining analyst at Red Cloud Securities said the US$90M in Argentina peso investment from Stellantis is a major stamp of approval for Argentina Lithium & Energy. "We believe that deals like this are very positive for the outlook for lithium, as it demonstrates the importance of the commodity in helping achieve the decarbonization goals set by various governments across the globe. We also believe that investment and M&A activity between automakers and miners will continue, as concerns around lithium scarcity grow, especially in the context of geopolitical issues," said Islam.

Argentina's lithium march gets a major boost

Brines are sampled at regular intervals during drilling. An inflatable ‘Packer’ is lowered down the bore to seal the interval for sampling.

The growing momentum behind Argentina's lithium march got a major boost at the start of this year as India announced its first lithium exploration project with the acquisition of five lithium blocks in Argentina. India, one of the world’s top greenhouse gas emitters, imported US$33 million worth of lithium in 2022-2023 mostly from China. It is pushing its production of electric vehicles and has vowed to become carbon neutral by 2070.

The Indian exploration and development of the five lithium brine blocks is spread around 15,703 hectares in the Catamarca province, where Argentina Lithium has acquired a 100% interest in over 25,000 hectares of the Incahuasi Salar. The company launched its first exploration program at the Incahuasi project in 2017 and has completed initial geophysical, surface sampling and drilling programs.

"The Indian deal is further evidence that the interest in lithium from Argentina shows no sign of slowing down, especially because countries and auto manufacturers seek to reduce dependence on lithium imports from China," said Rideout. He said the European Union's requirement for new cars and vans to have zero CO₂ emissions from 2035 and America's goal of having 50 percent of all new vehicle sales be electric by 2030, are also driving the hunt for the so-called "white gold" in Argentina.

The Oregon Group, an investment research team, in a report released in January of this year predicted a significant, sustained increase in lithium demand over the next 20 years, driven largely by the electric vehicle (EV) and battery sectors. Although this forecast comes amid a backdrop of price corrections in the lithium market throughout 2023, the global commitments to net zero will see continued demand for lithium, the report said.

According to Statista, the global demand for lithium will surpass 2.4 million metric tons of lithium in 2030, doubling the demand forecast for 2025. Increases in battery demand for electric vehicles are expected to drive the demand, which is forecast to reach 3.8 million tons by 2035.

Given the forecasted demand for lithium and the portfolio of projects held by Argentina Lithium & Energy, the company is in a very positive position due to its promising exploration results and strategic exploration plans.

To learn more about Argentina Lithium & Energy, visit their website here, as well as on:

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This is a promotional piece paid for by Argentina Lithium & Energy Corp. who is a client of Market One.

This post was authored by an external contributor and does not represent Benzinga’s opinions and has not been edited for content. This contains sponsored content and is for informational purposes only and not intended to be investing advice.