China’s Ganfeng Lithium Set to Expand Operations in Argentina
- August 22, 2022
- Posted by: Quatro Strategies
- Category: Mining
China’s largest lithium compounds producer, Ganfeng Lithium, is set to acquire Argentinian mining company Lithea Inc. for $962 million to secure more lithium production in Argentina. Privately owned Lithea owns rights to lithium salt lakes in Argentina’s mineral rich Salta province. Ganfeng aims to strengthen its upstream lithium production and its self-sufficiency with the deal, as growing demand for electric vehicles (EVs) push miners to look for more battery metal resources.
Lithea has salt lake assets at Pozuelos and Pastos Grandes in the Salta region. Its first phase of production is expected to have an annual capacity of 30,000 tons of lithium carbonate.
Argentina, Bolivia, and Chile share the region knowns as the Lithium Triangle, which holds more than half of the world’s main reserves in easily exploitable and economically profitable salt flats.
Meanwhile, Argentinian environmental groups are concerned about the lack of environmental standards of Chinese companies. They say their concern also stems from the lack of transparency, the violation of human rights and the asymmetrical relationship they have with the local communities where their projects are carried out.
The demand for lithium generates pressure from Chinese companies to have more control for the resources in the Lithium Triangle. China has an extremely dominant position of battery manufacturing as it controls 80%-90% of global capacity.
Ganfeng has also initiated construction in June of the Mariana lithium project in the Llullaillaco salt flat, in Salta. It is expected to produce 20,000 tons of lithium carbonate per year for export.
The Chinese company also holds a stake in the Cauchari-Olaroz project, in the Argentine provinces of Jujuy, Salta, and Catamarca, which is scheduled to start operations by end of 2022 and aims to produce 40,000 tons of lithium carbonate per year.
Chinese companies have also been seeking to expand operations in Bolivia’s Uyuni and Chile’s Atacama salt flats.
Analysts fear the three lithium nations could become economically interdependent with China. If they don’t have direct access to their own resources, they might have to negotiate with China to industrialize lithium, creating an asymmetry of power.
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