Argentina’s abundant lithium reserves are attracting substantial foreign investments, offering a potential catalyst for economic recovery. As the nation navigates ongoing negotiations with the International Monetary Fund (IMF) and the lithium market looks to regain its footing after a prolonged slump, French mining company Eramine, a subsidiary of Eramet (ERMAF), has announced a $800 million investment in Argentina’s Salta province.
Lithium, a key component in batteries for electric vehicles and various electronic devices, is a valuable resource in the shift toward renewable energy. Argentina is part of the “Lithium Triangle,” a region encompassing parts of Argentina, Chile, and Bolivia, containing 65% of the world’s lithium reserves. Eramine’s project in Salta could export around 4,000 tons of lithium in 2024, with production ramping up to 24,000 tons per year as the project reaches full capacity. This site will generate substantial revenue for Argentina and create employment opportunities, helping alleviate the country’s unemployment rate.
In addition to Eramine’s project, Emirati company United Mining Projects Corporation (UMPC) announced a $550 million investment in a lithium project in Catamarca, as reported by iProfesional. Marhen Lithium, their subsidiary, will lead this initiative, generating an estimated 700 jobs during the construction phase and 200 permanent positions. The project is expected to contribute USD 168 million to the local economy.
Beyond the immediate economic benefits, this project has the potential to serve as a model for future endeavors. By prioritizing responsible development practices and community engagement, UMPC can help mitigate some of the concerns surrounding resource extraction in Argentina, including environmental protection and domestic labor inclusion.
The IMF forecasts a 2.8% contraction in Argentina’s GDP for 2024, with high inflation persisting. However, they project a significant deceleration in inflation to 45% by 2025. While the IMF acknowledges the current economic contraction as a consequence of the government’s adjustment measures, it anticipates a turnaround next year. Still, Argentina’s economic outlook remains uncertain, with much hinging on the government’s ability to manage inflation, secure an IMF deal, and create a favorable climate for domestic and foreign investment.
