Coronavirus halts lithium expansion in Argentina and Chile
Projects under development halted and significant investments cancelled, as impact of Covid-19 pandemic begins to hit home.
Despite expectations of greater development, the lithium sector in Argentina and Chile is being slowed by the coronavirus. Projects under development have been halted by the mandatory quarantine, while significant investments have already been cancelled.
Argentina, Bolivia and Chile are part of the so-called “lithium triangle” of South America, a region with some of the world’s highest concentrations of the metal. It is central to the expansion of electric vehicles, the demand for which is expected to increase in the coming years.
Due to the quarantine measures, lithium production is expected to drop globally by 110,000 tonnes this year, representing a loss of US$960 million, according to English consultancy Roskill. In Argentina, production is expected to drop 35 percent, and in Chile by 20 percent.
On top of live projects slowing down, planned investments have been delayed or cancelled, in several cases by Chinese companies. China is the world’s leading consumer of lithium, primarily for battery manufacturing.
While Chile is a mining country with extensive development and exports of US$40,000 million per year in minerals, Argentina still has an incipient mining development – with exports of US$3.7 billion. The government is seeking further development and hopes that lithium will do just that.
“Lithium production is highly vulnerable to the kinds of disruptions a pandemic like coronavirus can cause,” said Emily Hersh, an economist specialising in the lithium market. “Quarantine is going to affect the industry generally.”
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