BUENOS AIRES (Reuters) – Argentina’s fledgling lithium sector has been torpedoed by the global spread of coronavirus, with operations stalled by a nationwide crackdown and some projects being abandoned as the pandemic has sharpened economic concerns in the country.
Argentina is part of South America’s so-called “lithium triangle,” a major sources of the light metal that is key to the development of electrified vehicles. It has been pushing new projects to catch up with neighboring lithium powerhouse Chile.
Those now are hanging in limbo, threatening what the country had hoped would one day be a $2.1 billion lithium export market, according to a government presentation, up from $190 million last year when it shipped 50,000 tonnes of the white metal.
“The quarantine is going to affect the industry across the board,” said Emily Hersh, a managing partner at Buenos Aires-based advisory DCDB Group, adding the longer-term hit would be reduced global demand for electric cars.
“The bigger issue for Argentina is going to be the global recession that’s going to delay electrification,” she said. The pandemic has already stymied a U.S. push to develop lithium, while miners have warned the virus could hit to sales and prices further this year.