Allkem General Discussion, page-3021

One of the benefits of AKE is its diversification and with diversification is also risks.

As we saw in the last conference call, Argentina has been playing around with tax credits. Below is an article that caught my eye on twitter. I thank ChatGPT for the extraordinary job it did in translating the article to English. It is just something that we need to synthesise into our analysis of the company and its strengths and weaknesses.

Have a great weekend all.


The government is focusing all its attention on lithium, the mineral of the future, due to its importance for the energy transition. It is analyzing sending a package of laws to Congress that aim to industrialize it, in order to add value and create jobs. The initiatives could include a "quota" law for the domestic market, mobile royalties and incentives for companies with a new framework for electromobility, according to what Ámbito was able to learn from official sources. All the measures that the government is planning will be made in agreement with the provinces, who own the resources. For the first time, the government and the provinces publicly revealed their plans, although not directly. They did so through a statement disseminated by the Lithium Table, made up of the governments of Jujuy, Salta, and Catamarca, along with the Secretary of Strategic Affairs, headed by Mercedes Marcó del Pont, and the national company Y-TEC. The statement is entitled: "The need for companies to add value to their production was agreed upon." With regard to establishing quotas so that it is not exported in its entirety, as is currently the case, the statement assures: "During the meeting, the Table, presided over by the governor of Jujuy, Gerardo Morales, agreed on the need to implement mechanisms for lithium producing companies to allocate a percentage of such production for industrialization and value-added in Argentina, particularly in the resource-producing provinces, in response to the challenge of electromobility and the need for storage of renewable energy."According to what this newspaper was able to learn, the official goal is to industrialize the mineral in Argentina, and for that, they believe that it should not be exported in its entirety as lithium carbonate or hydroxide to other countries that then advance in the assembly of cells and batteries. That is why the project they are working on could mean establishing a volume production quota for availability to industrialization projects. The quota could be progressive and start at 5%, and it could also include a "differential price", that is, with lower quantities and prices than export values.For companies to have an interest in advancing locally in industrialization, the government is working on a new electromobility law that provides incentives for companies. An official source assured that what is being proposed is similar to the "Chilean model", with the difference that the Argentine framework is much wider than the Chilean one, since it has several automotive terminals. Unlike the Chilean and Bolivian models, the idea of nationalizing lithium or declaring it a strategic resource is ruled out. In a January meeting with Adefa and Smata, the government conveyed to the automotive sector its interest in advancing in electric vehicles. Another issue raised in the Lithium Table statement has to do with taxation: "The Lithium Table expressed its concern that the provinces are not participating in the extraordinary profits obtained by companies, as a result of the considerable growth of the international price, for which measures to adopt are being evaluated."On this point, one of the measures that were being analyzed has already been implemented, which was the elimination of the refund to exports, a stimulus to companies that was transformed into a fund for the provinces. The refunds were established on a mineral that, in the format of lithium carbonate, was sold at the beginning of 2021 at u$.