Chinese mining companies have new projects in sight in lithium-rich Argentina and have committed to investing millions of dollars in pursuit of the “white gold,” the Argentine government indicated in an early June statement, following the visit to Shanghai of Economy Minister Sergio Massa.
Among those, Tibet Summit Resources will invest $1.7 billion in the Salar Arizano and Salar de Diablillos projects to produce between 50,000 and 100,000 tons of lithium between both projects, it said. Ganfeg Lithium, which currently has four projects in Argentina, will invest $2.7 billion to produce 74,000 tons of lithium carbonate.
For its part, Tsingshan Holding Group will invest $120 million in an alkaline chlorine processing plant in Jujuy. It is also developing the Salar Centenario-Ratones lithium project, in Salta province, with an investment of $770 million, which will start production in 2024, with a capacity of 24,000 tons per year, according to Argentine platform Minería y Desarrollo.
In addition, in the second half of 2023, the Olaroz-Cauchari lithium mine, owned by Exar, whose shareholders are Jiangxi Ganfeng Lithium Co. Ltd. of China and Canadian Lithium Americas Corp., will be operational. According to their agreements, the mine will send 40,000 tons of lithium per year to China, Argentine news site Ámbito Financiero reported.
“Argentina is practically offering all its resources to China in exchange for economic and political support because its economy is broken,” Jorge Serrano, a security expert and member of the advisory team of Peru’s Congressional Intelligence Commission, told Diálogo on June 28. “Argentina surrendered to Beijing in the area they are interested in, to have greater access to strategic resources such as lithium.”
Lithium underpins crucial industries worldwide, from batteries, nuclear power, transportation, digital devices, computers, health and air conditioning systems, to industrial drying, Serrano said.
With its position as the fourth largest global lithium producer, Argentina exported approximately 40,000 tons of lithium carbonate in 2022, Canadian magazine Mining reported. It plans to reach 200,000 tons per year by 2025, Ámbito Financiero reported.
Although China is making inroads in most countries in the hemisphere, the case of Argentina is one of the most controversial, according to the report Rapidly Transforming Hemispheric Security Threat Environment in Latin America, published on June 22 by the International Coalition Against Illicit Economies (ICAIE).
“Argentina went further than other Latin American countries; it even allowed a Chinese space station for military and civilian use to be placed in Patagonia,” Serrano said. “We are facing a China that wants to devour all of Latin America and on the other side a country that says: I am here for that.”
Argentina together with Bolivia and Chile form the lithium triangle, with approximately 55 percent of the world’s reserves. Of the three countries, almost all lithium deposits are under the control of provincial governors with ties to Beijing, ICAIE indicated in its report.
That autonomy at the local level provides opportunity for China to make deals with no accountability, no transparency, no environmental impact remediation, and no way to monitor whether traditional corruption practices are at play, the report adds, highlighting that China’s lithium extraction sites in Argentina are “located in increasingly important cocaine highway from Peru/Bolivia that enforces regional criminal structures.”
“Yes, that happens in Argentina’s regional governments. Corruption is China’s modus operandi. They corrupt the highest levels, such as presidents and ministers, to win tenders, acquire licenses and zero care for the environment, in addition to falsifying reports,” Serrano said.
“While tons of Argentine lithium will go to Beijing, Chinese companies are always the least concerned about environmental impacts,” Serrano added. “Over the years we will be able to see how they pollute, deforest, and loot the region’s strategic resources.”
The impact on people and habitat is usually due to fresh water scarcity after lithium extraction. Native peoples are left without water, vegetation disappears, animals have to travel up to 20 kilometers to graze, Peruvian investigative platform Ojo Público reported.
In addition to Argentina, China is investing in the world’s largest lithium producers and is extending its influence in countries with untapped reserves, such as Bolivia and Chile, Spanish daily El País reported.
“The exploitation of this mineral is a very ambitious and aggressive project by China to take possession of lithium reserves in South America,” Serrano said. “It is trying to do the same in other countries in the region where there is white gold.”
On the other hand, some countries, including the United States, have been warning the hemisphere through conferences and workshops about China’s aggressive expansion in the lithium field, Serrano said.
“The U.S. is taking steps to develop a swift and effective strategy to counter China’s onslaught in the lithium field, because China is involved in everything, leaving devastation,” Serrano concluded. “Beijing doesn’t do anything without ulterior motives.”