Tax cut for the third largest lithium reserves in the world! These Chinese miners will benefit!
Over the weekend, Argentina's government said it would further cut its mining export tax to boost efforts to attract foreign investors to develop the country's mineral resources, adding to a reduction in the tax from 12 per cent to 8 per cent in October 2020, although mining groups said the reduction was not enough.
According to statistics, as the world's third largest lithium resource reserves country, one of South America's "lithium triangle", Argentina, including the projects under development, under construction, a total of more than 60 salt lake lithium projects, but also gathered many "tun lithium" Chinese enterprises including Zijin Mining, Ningde Times, Ganfeng lithium. In addition, the development cost of Argentine lithium mine is low, about 3500 USD/ton. In the past two years, Argentine lithium resource project may usher in the peak of Investment by Chinese enterprises.
Argentina is a country that China's mining industry cannot avoid in 2021.
With the increasingly hot demand for new energy vehicles, lithium resources have become the industry chain of major leaders.
In 2021, Zijin mining won the 3Q lithium salt lake project in Catamarca province in northwestern Argentina at a price of about 960 million Canadian dollars (about 4.939 billion yuan).
In 2021, Tibet Qomolangma, the leading company in lithium extraction from salt lakes in China, signed an Investment Agreement for Salt Lake Resources Industrialization Development Project in Salta Province with the government of Salta Province in Argentina, with a planned total investment of 1.7 billion US dollars (about 10.8 billion YUAN) for the development of two salt lake projects, Anheles salt Lake and Arizaro Salt Lake.
In 2021, after the "snatch acquisition" of Ganfeng Lithium, Ningde Times and America Lithium, Finally, America Lithium successfully acquired The Pastos Grandes project located in Argentina with the price of 400 million US dollars (about 2.6 billion YUAN). Whether the competition between Ningde And Ganfeng lithium, two domestic companies, is "internal consumption" has also caused a hot debate. Interestingly, Ganfeng Lithium, which holds 12.5% of the company's shares, is its largest single shareholder. Ganfeng Lithium failed, but not completely.
In fact, compared with all Chinese companies in Argentina's lithium resources, Ganfeng Lithium takes the lead. In 2014, Ganfeng Lithium established a joint venture with international lithium and obtained 80% shares of Mariana Lithium Salt Lake project. In 2017, Ganfeng Lithium acquired part of the equity of American Lithium (LAC) and invested in the Cauchari Olaroz Salt Lake project.
Mariana Salt Lake is located in Sareta Province of Argentina. Currently, Ganfeng's indirect shareholding has reached 100%, and the controlled and inferred lithium resource amount is about 8.82 million tons LCE. The project has successfully completed the feasibility study in 2019.
Cauchari-olaroz Salt Lake, located in northwestern Argentina, is 46.67% owned by the company. With a lithium brine resource of 24.58 million tons LCE, it is one of the largest lithium extraction projects in the world, supporting annual production of more than 40,000 tons of battery grade lithium carbonate for 40 years. Most of the projects are planned to be completed by 2021, with trial production postponed to the first half of 2022 due to the impact of COVID-19.
In addition to the Chinese companies, global mining oligarchs have also set their sights on Argentina.
Rio Tinto, the world's second largest Mining company, announced on December 21, 2021 that it will acquire Rincon Mining Pty and its Rincon Salt Lake lithium project in Argentina for $825 million. It is reported that the total resources of the salt lake reached 11.77 million tons LCE and the total reserves reached 1.98 million tons LCE. The reserves will support a lithium carbonate plant with an annual capacity of 50,000 tons for 40 years.
With the deepening of global layout, Argentina will become a new battlefield of global lithium resources.
Of course, Argentina will further reduce the MINING export tax, not only for lithium resources, Argentina is not only lithium resources, according to the statistics of the international MINING JOURNAL "MINING JOURNAL", In the world's mineral resources, Argentina ranks sixth, belongs to the country with great potential for MINING. Argentina's dominant minerals are stone coal, gold, silver, copper, lead, zinc, iron, uranium, tin, gypsum, sulfur and so on. Argentina's mining industry has a unique advantage in the development of 75 percent of the undeveloped mineral resources, expansion of development, is also one of the reasons for the reduction of mining export tax.
It is worth the attention of all mining investors that Argentina's mining project development also faces many policy challenges. Argentina's federal government system makes mineral resources ownership belong to the provinces, and mineral resources policies are different, requiring the federal government to coordinate.
