Argentinian government will back price transparency in lithium sector

The development of a globally accepted lithium price would help the Argentinian government to develop policy in the country, the country’s undersecretary of mining development, Mariano Lamothe, told Fastmarkets recently.

“Today, there are many different prices, and a single benchmark price would be a positive step toward analyzing [price trends] to help us understand what public policies would be positive for the lithium industry in Argentina,” Lamothe said.

“We can choose to support lithium carbonate or hydroxide production in Argentina, or perhaps both. And the same would apply to battery technologies, which we would like to see developing in Argentina to make [the country’s industry] more competitive,” Lamothe added.

A globally accepted single benchmark price could also support investment into Argentina, which is home to multiple lithium projects, according to the official. These could make the country more competitive in the market, which is dominated by China.

“As we understand it, a price benchmark would help junior companies to raise funds. Argentina has a portfolio of lithium projects in early and late stages [of development] whose funding would benefit from a clearer market [direction],” Lamothe said. “The Argentinian government will give the necessary institutional support for the development of a lithium price benchmark.”

Transparency in prices would allow the government to use up-to-date information on lithium price cycles to help it direct policy decisions that would support particular projects at specific times. But the technological trends that underpin the evolution in the sector are also important, according to the official.

“[The market intelligence gained from price transparency] will also help us to study technological trends in the global market, so we can plan which types of infrastructure to support, and provide guidance for R&D policies,” Lamothe said. “Argentina has skilled people and a competent scientific environment, capable of leveraging the development of the sector.”

The lack of price transparency and a globally accepted lithium price benchmark have been deterrents to growth in the lithium sector, acting as a barrier to new investors that might otherwise be interested in investing in this battery raw material.

Fastmarkets and the London Metal Exchange will collaborate to develop a lithium price benchmark, they announced on June 10 this year.