Resource World Magazine

8 www.resourceworld.com A P R I L / M A Y 2 0 1 8 SOUTH AMERICA'S PROSPECTIVE LITHIUM TRIANGLE by Ellsworth Dickson Exploring Argentina Lithium & Energy's 20,500-hectare Arizaro Project in northwest Argentina. Photo courtesy Argentina Lithium & Energy Corp. With the impending advent of the wide- spread use of electric cars, trucks plus the millions of rechargeable consumer electronic devices that utilize lithium ion batteries, it is no wonder that numerous exploration companies have turned their attention to the vast Lithium Triangle in Argentina, Chile and Bolivia. It has been estimated that South America's Lithium Triangle hosts about 54% of the world's lithium resources. Most of the world's lithium has been produced by an oligopoly of produc- ers – often referred to as the Big Three – Albermarle Corp. [ALB-NYSE], pri- vate Sociedad Quimica y Minera de Chile (SQM), and FMC Corp. There are two sources of lithium – hardrock (the mineral spodumene) and lithium brines that formed in desert cli- mates where there is a slow inflow of lithium and other metals and salts but no outflow. Gradual evaporation over thou- sands of years slowly increases lithium grades to an economic level. A recent report by Global Market Insights, Inc. concluded that the global lithium ion battery market is set to surpass US $60 billion by 2024 with a global market of 534,000 tonnes of lithium carbonate by 2025. Some lithium min- ing operations are already producing the world's lightest metal from brines. In partnership with Toyota Tsusho Corp. and JEMSE, Orocobre has built and is now operating the world's first commercial, brine-based lithium operation constructed in approximately 20 years. During 2016, Argentina's two working mines produced 11,845 tonnes of lithium carbonate, or approximately 6% of global output. For 2017, output is about 17,500 tonnes. In Chile, the Salar (Spanish for salt lake) of Atacama, contains about 27% of the world's lithium reserve base and provides almost 30% of the world's lithium car- bonate supply. Chile is the most advanced country with regards to lithium extrac- tion, followed by Argentina. On the other hand, it is early days for Bolivia. During a recent presentation in Vancouver, Cesar Navarro Miranda, Minister of Mining and metallurgy for Bolivia, told the audience that the mining sector supports 37% of his country's population. His government is keen to attract foreign exploration and mining companies by offering various incentives as well as political and eco- nomic stability. Argentina, which already produces about 12% of the world's lithium, is also keen to attract international mineral explorers. At a recent presentation in Vancouver, Ing. Mario Osvaldo Cappello, Undersecretary of Mining Development and Mining Secretariat for the Argentina Ministry of Energy and Mining, said, "Since February 2016, when President Mauricio Macri took power, export taxes on minerals have been eliminated. There's a unified currency exchange with a streamlined process. The import of equip- ment for parts and mining are non-taxed and we also have a free flow of currency. In December 2017, Congress enacted two new laws, so all the investments for the construction of a project will have the VAT refund after six months." Capello added, "Up to this year, corpo- rate income tax was 35% and there was no rate for dividends. So this year, the corpo- rate income tax rate is 30% and dividends 7% and, as of 2020, that will change to 25% and 13% for dividends when rein- vesting in the country."

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