.....South American Govts (Chile, Argentina) look at lithium as a major source of foreign exchange earnings...this is their Gold. They are not going to let built lithium mines stay idle because the lithium price can't cover their all in operating cost. Prices would still be able to cover variable production cost, so they will proceed nonetheless.
....SQM made huge losses in Q1 2024, but that did not deter it from proceeding with expansion. But that is different in the case of ALB, because their decisions are more commercially based.
...Winter Hibernation has arrived for the lithium sector. And It won't be transitory.
...Lithium stocks will likely continue to fall not because there is less need for lithium or just owing to the low lithium price, they are falling because the new reality has caught up with a prior overstretched in valuations that were premised on huge exceptional margins that have now dwindled to almost nothing. In Q1 2024, ALB reported just 2.86% gross margin (Sales less Cost of Goods Sold)
Argentina Is About to Unleash a Wave of Lithium in a Global Glut
Several projects poised to start producing in coming months
New operations are set to push up national capacity by 79%
For all the money that’s poured into Argentina’s giant lithium deposits, the country has seen just one new mine come on stream in almost a decade. That’s about to change.
Four new projects will finally begin to churn out lithium in the weeks and months ahead, according to a yet-to-be released federal government time-line seen by Bloomberg News. That will almost double production capacity in Argentina, whose growth potential has long lured the attention of battery makers around the world.
The projects — built on salt lakes nestled in the Andes mountains in South America’s so-called lithium triangle — are a boon for new President Javier Milei, who desperately needs more export dollars to lift currency controls that are stifling Argentina’s crisis-prone economy.
Yet for global lithium markets, the extra production comes at a time when buyers are already well supplied, with inventories piling up amid the gloomy outlook for electric vehicle demand. Spot prices of lithium carbonate in China have slid to the lowest since August 2021.
Despite a flurry of prospecting and development, only three operations in Argentina currently export lithium. That’s still enough to have established the country as a major producer behind Australia, neighboring Chile and China. Of the three, only one is a newcomer — Minera Exar, which is majority owned by Ganfeng Lithium Group Co.
Now, Argentina is taking a genuine leap, with four new projects ready to begin full-scale operations and ramp up annual capacity by 79% to the equivalent of 202,000 metric tons, according to a Bloomberg breakdown of the unreleased government data.
While the new capacity won’t all be used straight away, it nevertheless represents a significant overhang in a market in which global production is estimated by Bloomberg Intelligence to total 1.4 million tons this year.
Rio Tinto Group is also aiming to have a 3,000-ton starter plant ready by the end of the year at its Salar del Rincon project, according to a presentation delivered by Santiago Cicchetti, Rio Tinto’s external affairs manager in Argentina, at a conference in Buenos Aires this week.
The June 26-27 conference was a hive of activity attended by top producers, prospectors, technology providers and provinces that have a big say over if and how natural resources in their territory get unearthed.
So far in Argentina, the lithium industry has centered on the provinces of Jujuy, Salta and Catamarca. But La Rioja, just to the south, is now making a push to tempt prospectors, Walter Gomez, president of provincial mining outfit Emse, said in an interview. La Rioja passed a controversial law last year allowing it to rescind mining acreage from any owners it deems to be land speculators uninterested in exploration.
The conference took place against the backdrop of much-awaited federal approval for Milei’s sweeping reforms, including a program of tax, currency and customs benefits for industrial investments that will benefit lithium developers.
