Modern Mining April 2024

COMMODITIES OUTLOOK

Is Argentina the answer to the ‘green revolution’ lithium supply problem? By Christian Möbius, CEO of Southern Cross Britannia & Jeronimo Wolf, Geologist at Southern Cross Britannia.

In an era where technological innovation intersects an urgent push for environmental sustainability, lithium has emerged as a critical element. The widespread adoption of lithium-ion batteries has been transformative, releasing our electronic devices from the constraints of power cords and facilitating mobility and convenience. Beyond the realm of consumer electronics, these batteries are pivotal for the decarbonisation of the global energy infrastructure, aligning with the shift towards electric vehicles (EVs) and renew able energy storage solutions.

By Christian Möbius, CEO of Southern Cross Britannia.

Lithium Demand Lithium’s journey from a niche industrial metal to a cornerstone of green technology is marked by a surge in demand unlike any seen before. Globally, the automotive industry sees the introduction of approximately 80 million new vehicles each year, with a growing percentage of these being electric vehicles, each requiring a significant amount of lithium for their batteries. This has placed unprec edented pressure on the lithium supply chain, prompting a race to secure resources capable of sustaining the transition to battery electric vehicles. The current forecasts predict that meeting the needs of global vehicle fleets’ transition will necessitate an almost unfathomable demand for lithium, projected to reach nearly seven million tonnes. The projection into the future, especially towards 2050, paints a picture where the global thirst for electricity and its share of total energy consumption must increase dramatically. This burgeoning demand for electricity, essential for eliminating the reliance on fossil fuels, is at the heart of the global energy

transition. Nations are crafting policies for signifi cant reductions in CO 2 emissions, with some setting their sights on ambitious net-zero emissions targets. There are various strategies to achieve these emis sion reductions, with a significant focus on the energy sector, which is responsible for roughly 75% of global greenhouse gas emissions. The lithium industry is expected to rise to these challenges with plans for operational expansions and initiatives for increased recycling efforts to support the anticipated demand. Argentina’s Lithium Potential and Southern Cross Britannia’s Hombre Muerto South Project Despite recent market fluctuations and a fall in lith ium prices from their peak in 2022, the economic viability of lithium production in Argentina remains strong. The country’s lithium production costs are still well below the market price for lithium, ensur ing that operations remain profitable and attractive for continued investment. This is testament to the efficiency and cost-effectiveness of the Argentinian lithium sector, particularly its brine operations, which are among the most economical in the world. Argentina’s lithium reserves are not just abundant; they represent a strategic asset with the potential to supply the insatiable global demand for this white gold. While Australia and Chile are currently lead ing the charge in lithium production, the spotlight is increasingly turning towards Argentina and its neighbour Bolivia. These nations are sitting on the largest reserves of lithium known today, signalling untapped potential that could significantly impact the global lithium market. Argentina’s competitive edge is bolstered by its lower production costs, primarily due to its extensive and rich brine deposits, which are cheaper to exploit than other methods, such as hard rock mining. The cost-effectiveness of extracting lithium from these brine sources in Argentina has cemented its

Jeronimo Wolf, Geologist at Southern Cross Britannia.

Development of lithium mining output between 1960 and 2021* (supplied by Deutsche Rohstoffagentur, data source: BGR 2022, S&P Global 2022, USGS 2022). *2021 = preliminary mining output data.

10  MODERN MINING  April 2024