CAUCHARI OLAROZ, Argentina (Reuters) – The giant pools of turquoise water in the mountainous deserts of northwest Argentina shimmer in the sunlight like oases and for lithium miners like Australia’s Orocobre Ltd (ORE.AX), that is exactly what they are.
The mid-cap miner is one of several lithium producers stepping up investment in Argentina amid expectations President Mauricio Macri’s business-friendly agenda will transform the country into South America’s top producer of the mineral, ousting neighbouring Chile in five years’ time.
Demand for lithium carbonate, which miners extract from the brine in these pools on the Atacama Plateau, is forecast to boom as production of electric cars rises. Lithium is a key ingredient for the vehicles’ rechargable batteries, allowing them to retain energy far longer, and its price has soared more than 30 percent to a record $12,000 a tonne this year.
Since Macri took office in December 2015 and opened the country to foreign capital, Argentina has received more investment than any other country in the ‘lithium triangle’ – the border region including parts of Chile and Bolivia that contains over half the world’s known reserves of so-called “white petroleum.”
Orocobre, which produces some 14,500 tonnes of lithium carbonate per year at a mine on the Olaroz salt flat, has announced plans to more than double its total production to 35,000 tonnes by 2019, in conjunction with its partner Toyota Tsusho Corp (8015.T)
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