Argentina’s Lithium Sector Poised for Growth Amid US Tariff Policies

New Tariff Policies May Propel Argentina to the Forefront of Battery Materials Supply

US President Donald Trump’s recent tariff measures could provide new opportunities for Argentina’s lithium sector. Many energy and mineral products, including lithium carbonate and hydroxide, are exempt from tariffs. The US push for localized battery production could make Argentina a key supplier of battery-grade lithium salts. Argentina’s lower-cost brine assets give it a competitive edge.

Shift in Global Battery Manufacturing and Tariffs Impact

Trump’s tariff policy imposed significant duties on finished batteries from China, Japan, and South Korea. This may speed up the trend of localized battery production in the US. Under the Inflation Reduction Act, the US is already moving towards local manufacturing. Major battery companies, including Panasonic, Samsung SDI, Ford, and Toyota, are planning new factories across the country.

However, the US faces a major challenge. With limited domestic lithium mining capacity, the country will increasingly depend on imports for raw materials. The US only has one operating lithium mine, Albemarle’s Silver Peak mine in Nevada. While the mine produces lithium carbonate and hydroxide, it can’t meet the higher purity standards needed for battery-grade lithium used in electric vehicles (EVs).

Argentina’s Competitive Edge in Lithium Salts Production

Argentina is positioned to produce high-quality, cost-effective lithium salts. Brine operations in Argentina are more efficient and cheaper than those in other South American countries or spodumene-producing nations. Though brine facilities need higher initial investment, their ongoing operational costs are lower than spodumene-based assets. This makes them attractive for global supply chains.

Argentina also benefits from a 3% royalty tax on lithium mining, compared to Chile’s 40% ceiling. Despite a 10% import tariff by the US, Argentina is well-positioned to expand production for US battery factories. Daniel Gonzalez, Argentina’s Vice Minister of Energy and Mining, stated that “All of Argentina’s lithium projects go to battery grade,” reflecting the country’s commitment to high-purity lithium production.

While countries like Australia, Brazil, and some African nations rely on China for lithium processing, Argentina’s direct production of battery-grade lithium gives it a strategic global advantage.