Lithium Production to Rise in South America to Meet Up Soaring Demand
- 17-Mar-2022 8:51 AM
- Journalist: Peter Schmidt
Lithium is a rare earth metal with the impending advent of widespread applications in Electric Vehicles (EVs) besides its utilization in numerous rechargeable electronic consumer electronic devices with Lithium-ion batteries. After COP 26 Glasgow, a stronger push towards a greener economy targeted the EVs as an alternative for the internal combustion vehicles (ICVs) that soared the demand for Lithium on a global scale. It is no wonder that the numerous exploration companies and energy conglomerates turned their attention towards the Lithium Triangle in Chile, Argentina, and Bolivia in the South American region. Several experts estimated that the triangle accounted to host approximately 54% of the world’s Lithium reserves.
In recent terms, the Argentinian government showcased a strong desire to boost domestic Lithium production. According to the market source, a bullish long-term outlook made the authorities look forward to incentivizing more new projects for Lithium extraction in the country in the next three years. Whereas currently Argentina's mining sector only accounts for 0.6% of the total GDP, it has the potential to grow to around 3% with an important pillar for the economy as 80% of the country’s mining potential is still unexplored. Argentina currently accounts for approximately 17% of the global Lithium output. The unexplored reserves are gaining investment from domestic major players as well as from the overseas market players from China, South Korea, and Canada.
As per ChemAnalyst, in the past few years, Lithium and its derivatives market observed an unprecedented surge amidst the supply-demand imbalance. Whereas, the steps made towards a cleaner economy keen attention from the major EVs players and conglomerates from the energy sector. The prices of Lithium took a toll on the rising demand outstripping the supply capabilities. As of now despite being the largest Lithium reserves in the South American region, China is the leading source of Lithium products and the global benchmark, and the Lithium-rich Latin countries have operated under a strictly restricted framework now they were slowly easing their operation to the global investors which would likely to ease the global supply outlook for Lithium in the upcoming period.