Argentina is fighting to become the lithium leader

The lithium triangle includes three South American countries: Chile, Bolivia and Argentina. The last of these – and the fourth largest producer in the world – was in particular vocal about its lithium plans. But becoming a lithium major has proven more difficult than expected in one key area: nuclear power.

In August this year, Argentina’s mining ministry declared that the country would seek to double lithium export earnings from $4 billion to about $10 billion over the next three years. This, the ministry said, will happen as more lithium projects come online, helping make Argentina the world’s largest lithium producer.

According to the same minister, the country was targeting an annual production of 200,000 tonnes of lithium carbonate equivalent as soon as next year. This could be achievable under the libertarian and strongly pro-business government of President Javier Milei. But there is one specific segment of the lithium industry that needs a somewhat different approach: lithium for nuclear power applications.

Bloomberg recently reported that Argentina is fighting not just for the top spot in the production of lithium carbonate, but also for a major role in the production of lithium-6 – an isotope of the element that is used in a new generation of fusion reactors and that could bring a much higher price. on international markets than lithium carbonate.

According to the World Nuclear Association, lithium-6 is a key source of tritium – a radioactive isotope of hydrogen used in thermonuclear weapons and what the WNA called “future controlled fusion”. Fusion research is ongoing, but it needs to create enough demand for that lithium isotope if prices on international markets are, according to Bloomberg, “in the tens of thousands of dollars.”

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The problem, according to that report, is that Mila’s government has decimated funding for scientific research in the area. The funding cuts add to pre-existing problems such as the devaluation of the local currency and capital controls, all of which are stifling the work of lithium-6 researchers.

“At the end of it all, we were left with only a tenth of the original funding,” a scientist working on converting naturally occurring lithium into the lithium-6 isotope. According to Bloomberg, the pain is being felt in research centers.

In the specific case of the project that scientist Fabiana Gennari, quoted above, is working on, the goal is to enrich lithium atoms using lasers—an environmentally better way to separate the lithium-6 isotope from the natural metal than mercury, which was used in the past. But these lasers cost a pretty penny, and government pennies aren’t as welcome as they used to be.

“We put our scientists through a very tough test because they have a hard time with the inherent uncertainty of research,” the head of the government agency that paid for lithium-6 project funding told Bloomberg. “Add to that their exposure to Argentina’s macroeconomic and institutional instabilities and it can leave great ideas stuck,” added Fernando Peirano.

Argentina’s inflation rate rose 3.9% in August. The figure was the smallest monthly price rise since the start of 2022, but the annual inflation rate remains at an unsustainable 200 percent, according to the data. Reutersas Mile’s government tries to control one of the highest rates of inflation in the world.

One could argue that those scientists are working in a very specific field that may or may not eventually produce commercial fusion reactors that could solve the emissions versus reliable energy dilemma. As such, it is understandably not a top priority for the government. However, the decline in funding due to inflation highlights the long way Argentina still has to go if it is to realize its commodity export ambitions.

By Irina Slav for Oilprice.com

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