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Argentina backs lithium price transparency

Jul 24, 2019 | 12:20 PM | London | Martim Facada

Tags  lithium, London Metal Exchange, LME, Argentina, Mariano Lamothe

The Argentinian government will back moves toward price transparency in the lithium market, a senior official in the ministry of mining development has told Fastmarkets.

The development of a globally accepted lithium price would help the Argentinian government to develop policies in the country, the country's undersecretary of mining development, Mariano Lamothe, told Fastmarkets.

"Today, there are many different prices, and a single benchmark price would be a positive step toward analyzing [price trends] to help us understand what public policies would be positive for the lithium industry in Argentina," Lamothe said.

"We can choose to support lithium carbonate or hydroxide production in Argentina, or perhaps both. And the same would apply to battery technologies, which we would like to see developing in Argentina to make [the country's industry] more competitive," Lamothe added.

A globally accepted single benchmark price could also support investment in Argentina, which is home to multiple lithium projects, according to the undersecretary. These could make the country more competitive in a market dominated by China.

"As we understand it, a price benchmark would help junior companies to raise funds. Argentina has a portfolio of lithium projects in the early and late stages [of development] whose funding would benefit from a clearer market [direction]," Lamothe said. "The Argentinian government will give the necessary institutional support for the development of a lithium price benchmark."

Transparency in prices would allow the government to use up-to-date information on lithium price cycles to help direct policy decisions that would support particular projects at specific times. The technological trends that underpin the evolution in the sector are also important, according to Lamothe.

"[The market intelligence gained from price transparency] will also help us to study technological trends in the global market, so we can plan which types of infrastructure to support, and provide guidance for R&D [research and development] policies," Lamothe said. "Argentina has skilled people and a competent scientific environment, capable of leveraging the development of the sector."

The lack of price transparency and a lack of a globally accepted lithium price benchmark have been deterrents to growth in the lithium sector, acting as a barrier to new investors that might otherwise be interested in investing in the battery raw material.

Fastmarkets and the London Metal Exchange will collaborate to develop a lithium price benchmark. The development was announced on June 10 this year.


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