The Puppeteer Behind Argentina’s Abundant Lithium Fortune?

Argentina stands poised to be a significant player in the globe’s electric revolution, but at what price?

The power for our handheld devices and computers – lithium – is also a critical component in shifting from carbon-emitting fossil fuels to a world powered by rechargeable energy and electric vehicles. The need for this resource has skyrocketed, with worldwide lithium production tripling and usage growing by 8.9% per year from 2010 to 2020. For instance, a Tesla Model S battery requires approximately 12 kg of lithium.

The “Lithium Triangle” of South America, encompassing regions of Argentina, Chile, and Bolivia, contains in excess of 75% of the planet’s lithium. Argentina, my homeland, is a significant force within the lithium industry, ranking as the fourth largest global producer and harbouring over 20% of the world’s reserves valued in billions.

Miles upon miles of age-old salt flats, or ‘salares’, house the vast reserves of lithium, serving as a lifeline for unique natural habitats and indigenous societies. These barren yet striking terrains significantly contribute to the local wildlife and their survival, impacting regional climates and water cycles.

Predictably enough, global corporations have descended on these territories, lured by the prospect of massive profits and the area’s cost-effective extraction processes. However, such commercial activities come at a high price for the environment and local inhabitants, who are grappling with the hardship of affording everyday essentials and access to water, while their precious natural resources are being exploited by overseas businesses.

Presently, Argentina epitomizes the so-called Lithium Paradox:

a self-proclaimed route to sustainability that is destroying biological diversity,
economic growth pledges that are meaningless as profits are funneled to foreign financial institutions,
a worldwide climate emergency where the relentless reliance on fossil fuels by large oil corporations impedes significant strides towards a cleaner, electricity-based alternative.

Allow me to guide you through this.

Titan Miners: Titan Consumers

Groundbreaking studies by Argentina’s Net Zero Pathways Initiative have unveiled astonishing findings: five titan lithium mining enterprises possess around one million hectares of salt flats in the country’s northwest – an expanse likened to the size of Lebanon.

As a consequence, these businesses have a monumental impact, not only on the regional economy through job creation (even amidst the bulk of capital flight from the country), but also, they wield ultimate control over water resources in one of the planet’s most arid regions, all while engaging in a highly water-demanding extraction process. Indeed, within the lithium mining industry, water is the prime commodity.

These “titan-mining” corporations obtain lithium by elevating the brine trapped beneath the salt crusts. Subsequently, they leverage the harsh desert sun to evaporate almost 95% of the projected 2 million liters of water consumed in the production of each tonne of lithium. Simultaneously, they discharge vast quantities of carbon, previously locked safely below, into the atmosphere as CO2. This brine, initially of turquoise hue, transitioning to a deeper yellow as it reaches a lithium concentration of 6% in water, is thereafter chemically processed to extract the lithium needed for rechargeable batteries.

This activity poses a significant threat to biodiversity and climatic stability. Annually, it drains enormous volumes of water from the desert’s water cycle and risks contaminating underground freshwater supplies with salt, due to contact with brine. The local communities already tackling water scarcity bear the major impact of this degradation, along with the fauna and vegetation reliant on salt flats for their natural water filtration system through soil and rock.

So, Who’s Truly in Command of Argentina’s Lithium wealth?

→ Overseeing more than 320,000 hectares is Litica, the lithium subsidiary of Pluspetrol, the third-largest oil firm in Argentina. The enterprise is the brainchild of Edith Rodríguez, the wealthiest woman in Argentina, and is conveniently based in the Netherlands.

→ Following this, Arcadium Lithium holds sway over at least 232,637 hectares. This giant emerged from a 2024 union between American Livent and Australian Allkem. Now, Arcadium stands as the third most substantial lithium producer on a global scale. Its shareholders comprise four of the biggest asset management firms worldwide, namely Blackrock, HSBC, JP Morgan, and Vanguard. This information came to light after an investigative study by NGOs, Ruido and Fundeps.

→ Integra Lithium, commanding at least 163,000 hectares, is next in line. It’s a branch of Integra Capital, an investment firm owned by José Luis Manzano, a business magnate from Argentina, who formerly held the position of the Minister of the Interior.

→ Ganfeng Lithium, originating from China, has control over at least 122,432 hectares, thanks to a collaboration with Canada-based Lithium Americas and Jujuy state-operated JEMSE.

→ Finally, we move to Rio Tinto, holding 83,000 hectares. As 2024 dawned, this British-Australian mining titan was all set to kickstart the construction of a processing plant with the capacity to produce 3,000 tonnes of lithium annually in Salta, according to a report by financial news source Ámbito Financiero.

These ‘Big Five’ hold a significant chunk of Argentina’s lithium pie. While they establish a local affiliate to purchase the land, the real ownership resides abroad. To illustrate, Ganfeng manages its business through EXAR, an entity registered in Argentina.

The pattern is clear in the lithium mining sector, much like other mining industries. Corporations accumulate land, stake their claim on deposits, and then transfer these projects to larger companies capable of extraction. Authorizations are purchased and swapped, causing a shadow over environmental controls and regulations.

In a nutshell, Argentina’s lithium wealth is ensnared by foreign investment, enabled by a mining policy that caters perfectly to speculative commerce.

A Cutthroat Approach for Education, A Green Signal for Exploitative Industries

Under the stringent regime of the right-leaning President Javier Milei, the budget for education and scientific institutions is being mercilessly trimmed.

In the face of a substantial inflation rate nearing 300%, the government’s decision to hold this year’s budget for universities and scientific research equates to a drastic 80% cut in real terms, says the University of Buenos Aires. Earlier this month, the University found itself in a self-proclaimed ‘economic crisis.’ The repercussion is that campuses are struggling to meet their electricity expenses, and climate research is teetering on the edge of ruin. Provoked by this, Argentina’s academics, students, as well as citizens (including myself) took part in a countrywide protest on Tuesday, April 23.

A prominent Argentine meteorologist and former vice-chair of a key working group for the latest evaluation report from the Intergovernmental Panel on Climate Change, Carolina Vera, expressed that she had never experienced “such a scale of demolition by the ways of shrinkage in research grants and programs, combined with an open scorn for knowledge.”

Since 2021, Milei has vociferously labeled climate change a “fabrication by socialists” and has even started to challenge the validity of public education, attributing it to the spread of Marxist beliefs.

Milei’s disregard for scientific perspectives on global warming is matched by his bleak outlook on environmental safeguards. During his presidential campaign, he made a shocking remark that a firm should be permitted to pollute a river as per its wish.

The existing scenario of lithium mining in Argentina is not just a mere correlation; rather, it is blindingly evident.

Conversely, the International Monetary Fund has voiced support for the intensification of Argentina’s oil, gas, and (unsurprisingly) metallic mining investments to bolster exports and fiscal earnings, as mentioned in their financial analysis published on February 1st. Following this evaluation, $4.7 billion was released to aid the nation’s public policy.

Ajay Banga, the chief of the World Bank, has expressed admiration for Argentina’s economic trajectory and is enthusiastic about future collaborations with the Argentinian government.

Yet, amidst this, how can the human toll of this profound economic readjustment be ignored?

Does this serve as a solution when the lives of individuals and their democratic privileges are under threat? Or are these entities merely masquerading behind the veneer of funding while surreptitiously seeking hidden riches?

Pension funds are dwindling, job losses are spiking while public utilities are deteriorating. Joblessness is on the rise, and the poverty rate is increasing.

In the meantime, Argentina is combating a spree of climate and weather-induced crises, ranging from relentless dengue epidemics caused by El Niño rains to blistering heatwaves and wildfires. Adding to the plight, a severe drought is predicted from November 2024 to February 2025 as the El Niño cycle transitions to La Niña. The National Meteorological Service is instrumental in forecasting these conditions and alerting the public. However, the recent loss of 73 technicians hampers our disaster preparedness and our research capabilities on climate change.

It’s paramount to remember that climate change denial isn’t rooted in science. It’s merely a ruse to permit destructive extraction businesses to flourish, bypassing environmental regulations designed to govern the utilization of natural assets and wealth disparity.

Undoubtedly, we should expedite the electric revolution and move towards phasing out fossil fuels on a grand scale. Nevertheless, saving our planet should not be at the expense of annihilating delicate ecosystems and communities. It’s crucial to reassess the legal constructs guiding lithium mining as the current protocol favours the agenda and caprices of multinational exploitative enterprises like Minera Exar.

The lithium mining industry cannot be deemed a sustainable or equitable solution if it leads to: