Tensions for the development of lithium | A sector with the potential to export 5 billion dollars in 5 years

“We should look at Lithium as a strategic resourcePresident Alberto Fernandez publicly retracted his thesis for the first time during his New York tour a little less than a month ago. The statement went unnoticed by the public—students and members of NYU’s traditional New School community—but it turned out to be a major and complex issue (when not) for the economic development of the country.

The complexity lies in the fact that unlike Bolivia and Chile, neighbors of the famous lithium triangle that concentrate 58 percent of the world’s reserves of the mineral, Argentina has a federal system for regulating and promoting mining activity through it The provinces control the mining resources and the jurisdiction to grant concessions to explore and exploit, while The nation receives the most tax resources linked to activity and Productivity policy and science and technology tools.

“that it It is politically unlikely that the concession system derived from the province’s original domain will be modified for natural resources. It was ratified by the 1994 constitution. The challenge then is to coordinate policies between different levels of government in order to address tensions and imbalances,” stated in a document published by the think tank. is found The product of specific research on this topic. This wouldn’t be the first time the president has taken a comprehensive stance on an issue that has not yet gained traction. From the government they did not speak again, nor do they accuse that there is a plan for this.

Three sad tensions

Work by researchers from the Fundar Carlos Freytes team, Martín Obaya, and Víctor Delbuono highlights three major tensions that arise from the mining management system for implementing productive development policies around lithium: Distribution of responsibilities between the national and provincial levels; The Science and technology policy focus on the most advanced links in the value chain and the current productive realities of lithium in the country; and judgment social and environmental of lithium.

Provinces have at their fingertips the conditions that companies are required to access resource exploitation rights. “Recruiting labor and purchasing locally within each province’s borders creates entry barriers for companies from other provinces and generates significant problems for developing suppliers with more complex production and technological capabilities,” they say from Fundar.

On the other hand, the tax structure for lithium mining, which is centered in the nation, could be a source of funding for capacity development, but it lacks the progressive tools to tax unusual income or prices. The Mining Investment Law stipulates a maximum collection limit by the governorates, while the taxes collected by the state on the activity are not specifically allocated, limiting their link to productive development policies. In the case of Chile, for example, a portion of the proceeds from lithium mining are used to fund research and development activities to process and transform the resource.

“Most human resources and budget in Science and Technology (By Conicet and I + D + i Agency) Focuses on the downstream sector, for example, in the development of lithium-ion battery technology. This is the part where there are significant financial, technological and commercial barriers to entry for Argentine companies,” according to the Fundar document, which ensures that there are large areas of job vacancy on issues critical to producing lithium from salt flats, such as developing more sustainable production methods, or affecting the hydrological balance. for salt flats, or managing social and environmental demands.

A separate paragraph deserves environmental imbalances resulting from excessive water consumption in extremely arid regions. “Argentina is the fourth country with the highest number of social and environmental conflicts in mining after Mexico, Chile and Peru. In total, more than 50% of mining projects have been canceled or temporarily suspended due to social resistance,” they say from Fundar.

In a special document on this specific topic prepared by Fundar María Victoria Arias Mahiques researchers Malena Galuccio and Carlos Freytes, they assert that there is no unified strategy in managing its resources. Cases of public engagement and their clarification with the Free, Prior and Informed Consultation (FPIC) and Environmental Impact Assessment (EIA) procedures and their effective implementation “gaps exist between different jurisdictions”.

“Approval Environmental Impact Assessment has been standardized as a mechanism for negotiating with mining companies the terms of their operationssuch as the contracting of goods and services and employment in the provinces,” he asserts. Another critical axis in this sense is the relationship with indigenous communities and peoples. Mining activity in the high Andean ecosystems overlaps with lands used and occupied by local people. The population has been around for more than 10,000 years. .