By Mariano Espina
In the last few weeks, there have been successive contacts between Argentina and the United States with a common objective: to reach an agreement so that national lithium production can be part of the benefits package granted by the Inflation Reduction Act promoted by Joe Biden and approved in 2022 in the US Congress.
As a result of this Act, up to US$400 billion will be invested to promote the transition to clean energy.
This Act reaches countries with a free trade agreement with the United States, such as Australia and Chile, direct competitors of Argentina in the race for white gold, and the national government is looking at the window of opportunity to reach a bilateral agreement – like the one reached by Japan – to continue encouraging investments in the country.
Two executives of lithium companies in Argentina talked to Bloomberg Línea about the impact such an agreement could have on the country.
Martín Pérez de Solay is managing director and CEO of Allkem Limited, one of the two companies already producing lithium in Argentina.
According to the executive, an agreement with the United States for the IRA would be “very positive for the industry, and I believe that the country is following the right steps to be part of the benefits that this new agreement will bring for the whole industry and the country in particular”.
Ignacio Celorrio, president for Latin America of Lithium Americas Corp, agreed with his colleague and said, “It would be very positive that Argentina’s production qualifies for the level of benefits they give in the United States”.
In addition, Celorrio highlighted that “there have been conversations at the first level to achieve it, and if it were granted, it would be very good for Argentina.”
WHAT HAPPENS IF THERE IS NO AGREEMENT WITH THE UNITED STATES?
Pérez de Solay does not believe a lack of agreement will harm the country.
“The demand for lithium is very high, and the fact that the agreement applies only to certain categories of vehicles will continue to allow Argentina to continue exporting lithium to the North American market.”
However, he said that “the power of the agreement greatly improves the sector’s competitiveness”.
“It is positive for Argentina and the United States to agree on the IRA; it is a good initiative what the government is doing.”
With information from Bloomberg