BUENOS AIRES (Reuters) – Units of Argentina’s state oil firm YPF will next month begin lithium exploration in a first-ever entry into the sector by state-run miners as the government aims to benefit from surging demand for the battery metal, according to a statement on Monday.
Lithium prices have soared past $70,000 per tonne this year as the major automakers scramble to secure more supply of the ultra-light metal to shift production from fossil fuel-burning engines to electric-powered vehicles.
YPF lithium units, YPF Litio and Y-TEC, announced in a statement on Monday the start of work on a 20,000 hectare area lithium prospecting project in Fiambala in western Catamarca province, a partnership with local mining firm Catamarca Minera y Energetica. The project seeks to identify the highest lithium concentrations in Fiambala salt flats.
The statement did not disclose how much they would invest in the project or the expected duration of the exploration phase.
Argentina’s is the world’s fourth biggest producer of the coveted white metal, with around 20 other lithium projects currently under development, according to Roberto Salvarezza, chairman of the boards of both YPF units, stressing that those are run by foreign or private miners.
“Now for the first time we have the possibility of a national company having a presence in obtaining the resource,” Salvarezza is quoted as saying in the statement.
Argentina produces around 8% of global lithium, with neighboring Chile accounting for about 22%.
Argentina could significantly grow its lithium production given its status as the world’s second largest lithium reserve, according to U.S. Geological Survey estimates, with 19.3 million tonnes.
Only Bolivia holds more at 21 million tonnes, though it has for years struggled to get its state-run production off the ground.
The three South American countries account for more than half of estimated global reserves, mostly held in sprawling salt flats.
(Reporting by Walter Bianchi; Writing by Sarah Morland; Editing by David Alire Garcia and Chris Reese)