Lithium: Argentina sees future lithium advancements, though FARN warns of environmental and social responsibility failures in the country

Neo Lithium project

Argentina continues to be one of the fastest developing jurisdictions for lithium projects, with over 50 projects under exploration in the country in June 2019. Neo Lithium reported the discovery of lithium-bearing brines at greater depth after further drilling at the Tres Quebrada project, Catamarca province. The additional drilling suggests that the mineral resource announced in the May 2019 pre-feasibility study has further scope for expansion, though further drilling will be required to classify the intercepts as resources and to better understand the brine chemistry and permeability. Other lithium projects in Argentina have also reported advances, with Millennial Lithium submitting an environmental impact assessment for the Pastos Grandes project and Lake Resources securing commitments for US$24M after a share placement, which is to be used to complete further drilling at its Cauchari project.

Roskill View

Development of lithium resources is occurring rapidly around the world but projects in Argentina, Chile and Bolivia are being scrutinised as a result of their location in environmentally and socially sensitive regions. Clashes between local communities and some lithium operations and projects over water usage, pollution and employment continue to mar the industry’s reputation in Argentina, despite some companies focussing heavily on community involvement and consultation. In May 2019, a report by Fundacion Ambiente y Recursos Naturales (FARN) highlighted failings in the local consultation process at certain lithium operations in Jujuy province and also identified a lack of cohesiveness between local and national legislation.

Argentina’s potential to ramp-up lithium production and supply growing demand from battery manufacturers is unquestionable, with existing producers Livent Corporation and Orocobre both looking to expand capacity and advanced lithium projects such as Lithium Americas’ Salar de Cauchari-Olaroz scheduled to enter production in late 2020. Failures to evaluate environmental and social responsibility could, however, jeopardise future projects and expansions in Argentina and cast a long shadow over all lithium operations in the region.

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