Seems Galaxy is falling behind as Argentina’s lithium producers hopeful as Fernandez set to take power

Reuters | November 15, 2019 | 9:24 am Battery Metals Intelligence Latin America Lithium

Ganfeng Lithium has a 50% stake in the Cauchari-Olaroz project in Argentina. Image courtesy of Lithium Americas Corp

Argentina’s lithiumproducers are cautiously optimistic that President-elect AlbertoFernandez’s incoming administration will not restrict capitalflows or set other policies that could hamper their ability tosupply the electric vehicle battery metal.

Fernandez, a member of the Peronist party that has supportedmore economic intervention by government, defeatedbusiness-friendly incumbent Mauricio Macri in last month’selection.

The country also became one of the cheapest places to produce lithium from brine when Chile raised industry royalties last year

The last Peronist president, Cristina Kirchner, imposedstrict standards for several industries, including lithium,limitations that slowed Orocobre Ltd’s buildout of alithium project in South America’s second-largest economy.

Fernandez so far seems keen not to mimic that approach. Hevowed earlier this year to support lithiuminvestment.

Fernandez is set to take office on Dec. 10. His cabinetchoices will be closely watched by lithium producers.

“We remain committed to advancing our project on ourtimeline,” Lithium Americas Corp Executive ViceChairman John Kanellitsas said on the sidelines of this week’sBenchmark Minerals Intelligence electric vehicle supply chainconference in Los Angeles. “We’re not taking our eyes off theball.”

The company is developing a lithium project in JujuyProvince with Ganfeng Lithium Co that is expected toopen in 2021.

“There’s a concern we’ve moved from a federal governmentthat’s market-focused to a soft socialist view,” Lake ResourcesNL Managing Director Stephen Promnitz told theconference. The company holds acreage in four Argentine lithiumdeposits.

“From an operational perspective, nothing has changed due tothe election,” Promnitz said. “But it has from an internationalperspective on capital.”

Orocobre spokesman Andrew Barber said the company looksforward to working with Fernandez.

Other parts of Argentina’s massive commodity sector areanxious. Sales of Argentine corn and soybeans are jumpingcompared to last year on worries of possible export taxincreases.

Despite the federal uncertainty, executives noted that thethree Argentine provinces with large lithium deposits have longhad Peronist administrations that work well with industry.

“Locally and provincially in Argentina, we see no concernson doing business,” Carlos Vicens, chief financial officer ofNeo Lithium Corp, which is developing a lithium projectin Catamarca Province, told the conference.

The country also became one of the cheapest places toproduce lithium from brine when Chile raised industry royaltieslast year.

That’s a benefit for Argentina, where many lithium producersare sending in capital, not looking to pull out, said LiventCorp CEO Paul Graves.

The election “really does not change our expansion plans,” Graves said.

(By Ernest Scheyder; Editing by Cynthia Osterman)

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