New Latin American Lithium Chamber will fight for a transparent price

Buenos Aires, May 12 (EFE).- The new Latin American Lithium Chamber, which will be formally presented this Thursday and is currently made up of representatives from Argentina, Chile and Peru, will fight for the creation of a «transparent» market that allows Formation of the price of lithium at the regional level.

«This chamber was created to develop the process of setting prices and promotes the development of a lithium market,» the president of the recently formed Latin American Lithium Chamber, Argentine Pablo Rutigliano, said in an interview with Efe.

The new entity is made up of technical professionals and SME entrepreneurs from the sector in Argentina and Peru, in addition to the Chilean Mining Chamber, and seeks to add partners from Bolivia, Mexico and Brazil.

Its objective is to be able to transparently define lithium prices through the creation of a market, an index of the value of lithium and models of present and future contracts in Latin America.

Lithium production in the region has its heart in the so-called «lithium triangle» made up of the Andean salt flats of Argentina, Chile and Bolivia, countries that, according to the latest data from the United States Geological Survey, concentrate 55 .9% of the world’s known resources of this metal.

If the resources identified in Mexico, Peru and Brazil are added, Latin America, with a total of 52.8 million tons, accounts for 59.3% of global resources, while reserves (resources legally, economically and technically feasible to extract) in the region are much lower, although they still represent 52.2% of world reserves.

Rutigliano pointed out that lithium mining in the region is dominated by multinational companies that leave «little space» for SMEs and «embryonic» projects.

According to him, the multinational mining companies -and also some governments- do not recognize lithium as a «commodity», establishing «minimum reference prices» in contracts between private parties and preventing the market from freely setting the price, «which makes that the economy is totally opaque» and encourages lithium to be industrialized outside the producing countries.

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DEMAND AND PRICES

A limited supply and growing demand for «white gold» for the manufacture of batteries for energy storage and the production of electric vehicles continue to push lithium prices higher.

At the beginning of 2021, a ton of lithium carbonate equivalent (LCE) was worth $6,750. A year ago, $9,000. And right now it’s around $75,000.

These are the prices that arise fundamentally from contracts between private parties in China and other Asian countries – where the world’s battery production is concentrated – and which are reflected as a reference on the blackboards of the London metal market but which, according to Rutigliano, do not they are the ones that are handled in South America, «where the price is minimal» and are established by few companies, in part, to pay less taxes.

NATIONALIZATION AND INVESTMENTS

The president of the Latin American Chamber of Lithium considered that Mexico’s recent decision to nationalize lithium «is not going to generate great attractions for investments» and pointed out that, on the contrary, to add more investments it is necessary to «open the markets», «taking care of investments and letting them come, but with a specific, clear and transparent regulatory vector».

«I am not in favor of the nationalization of lithium, but I am in favor of developing a market where everyone participates in the formation of the price, the capture and the transformation of these raw materials in the regions,» said Rutigliano, for whom it is » fundamental» to establish a regional reference price to allow all actors in the lithium transformation chain to have clarity and certainty regarding costs.

Rutigliano has already established the company Mercado de Metales in Argentina with a view to generating a market where sales contracts are displayed and even lithium futures contracts are entered into and digital assets are generated from the «tokenization» of lithium as a physical asset. certified, something that in Argentina is already done in the agricultural sector, with the generation of «cryptoactives» backed by soybeans, wheat and corn.

His proposal, which he now hopes to promote from the new Latin American chamber, finds, however, resistance, mainly in Argentina and Bolivia, as he admitted.

«It does not matter. We are going to continue fighting, because the objective is a future 30 or 40 years away,» he assured. EFE

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