There has been a surge in the acquisition of lithium assets in the elevated regions of northwestern Argentina as more companies place their bets on the growth potential of this metal. This development is not unexpected, considering that lithium plays a crucial role in the energy transition towards achieving net-zero carbon dioxide emissions. Developers are aiming to scale up production to meet the anticipated surge in demand, particularly for electric car batteries.
The increasing adoption of electric vehicles is a significant factor. Projections by Gartner, a research and consulting firm, estimate that makers of electric vehicles will ship 15.4 million units globally this year, representing a 34% increase from the 11.5 million units in 2022. Furthermore, shipments are expected to rise by 20% in 2024 to reach 18.5 million units.
Federico Sulprizio, Tecpetrol’s Senior Manager of Energy Transition Planning, expresses confidence in the continued growth of electric car sales. He anticipates that electric vehicle sales, encompassing cars, buses, heavy trucks, and vans, will experience a 2.5-fold increase, reaching 40 million units in 2030, up from 15 million in 2022.
This positive trend in electric vehicle adoption aligns well with the demand for lithium, a pivotal material for manufacturing car batteries. Lithium-ion batteries are preferred by automakers due to their high power-to-weight ratio, energy efficiency, solid high-temperature performance, long lifespan, and low self-discharge.
The rising demand for electric cars is expected to sustain lithium prices, which, after surging to $80,000 per metric ton last year from a steady range of $10,000-$15,000 in the previous years, is projected to average between $23,000 and $35,000 in the medium term and $20,000 in the longer term.
While Australia, Argentina, Chile, and China are currently the major lithium producers, generating an estimated 1 million tons this year, an increase from 700,000 in 2022, there is still a gap to meet the 2.5 million tons needed for car battery demand in 2030. Argentina, with expected production of 40,000 tons this year, is poised to contribute significantly with the expansion of existing projects and the introduction of new ones, potentially reaching 100,000 tons in 2024 and 250,000 tons in 2025.
Tecpetrol recently strengthened its position in the lithium market through the acquisition of a controlling stake in Canada-based Alpha Lithium, securing lithium assets in the Salar de Tolillar and Salar del Hombre Muerto salt flats in northwestern Argentina. These strategic acquisitions align with Tecpetrol’s commitment to navigating the Argentine market’s economic and political volatility effectively.