It is the country with the most lithium projects in the world, a critical mineral for electric mobility, but political and environmental risks doubt its future.

The Argentine Puna is home to one of the most coveted territories in the country: lithium salt flats. Luis Vacazur’s trucks drive daily through this semi-desert area at 13,000 feet above sea level. At 45, he runs a high-mountain logistics company that serves mining firms from all over the world. He is one of the winners of the lithium boom, a key mineral for electric mobility.

Vacazur is amazed by his success when he recalls that, in his childhood, the main way they made money in his hometown was by selling souvenirs to tourists. Like most of San Antonio de los Cobres’ 5,000 inhabitants, Vacazur belongs to the indigenous Kolla community.

“Mining has changed our lives,” Vacazur said. 

Lithium is a promise of investment, employment, and exports that has Argentina hopeful after more than a decade of stagnation. A promise that is becoming a reality, as the Vacazur case shows. But political and environmental risks doubt the industry’s future.

Exponential growth is expected for lithium. The International Energy Agency (IEA) estimates demand will increase 40 times by 2040. This is especially significant for Argentina, which holds two-fifths of the world’s reserves. And it is the country with the most lithium projects about to enter production.

Since 2011 Argentina is stagnant and does not create private employment. GDP per capita declined by 13% in the last decade and the country fell from 51st to 61st in the world ranking on this indicator. During this period, the peso devalued more than 95%. Argentina is one of the Latin American countries with the lowest levels of exports and foreign direct investment in relation to its economy. Lithium raises expectations because it can attract capital and boost exports. This is essential for a country struggling to obtain dollars to pay its foreign debt.

Argentina can increase its lithium production sevenfold in the next five years, according to Víctor Delbuono, former Director of Mining Economics of the Nation. More advanced projects are expected to start operating between now and 2028, bringing production capacity to 275,000 tons of lithium carbonate. This means that it can surpass the current capacity of Chile, the world’s second-largest producer after Australia.

In 2021, Argentina exported $200 million in lithium but more than tripled the figure in 2022 because prices soared. For the next five years, Delbuono estimates exports will increase from US$ 700 million to more than US$ 5 billion. This is as much as the wheat sector, currently the country’s fourth major exporter after soybeans, corn, and oil and gas. 

All lithium produced is exported, mainly to China. Argentina is also the principal supplier to the U.S.: more than half of its lithium imports come from the South American country.

Lithium project investments range between $400 million and $800 million, according to Santiago Dondo, former Undersecretary of Mining Policy of the Nation. Each one employs more than 2,000 workers during construction and 800 operators once in production.

"For the region where this happens, it has a tremendous impact," Dondo said. "These jobs pay the highest wages in the country and generate indirect jobs."

There were 3,500 workers in the sector last January, according to government data. Delbuono estimates two to three indirect jobs for each mining worker.

Law risks and environmental concerns

Regulations explain part of lithium take-off in Argentina. Laws are less strict than in neighboring Bolivia and Chile. The three form the lithium triangle, which contains 65% of the world's reserves. However, this advantage may disappear soon.

A group of pro-government deputies presented a bill to declare lithium strategic. It proposes that the State should have priority in the purchase of the mineral and the power to prohibit its export. This regulatory change would put Argentina on par with Chile, which established tough regulations for lithium exploitation in 1979, and Bolivia, which declared it strategic in 2008.


Despite the lithium optimism, there are communities that are trying to stop it. In Fiambalá, Catamarca, neighbors organized an assembly to oppose the Tres Quebradas project. Owned by the Chinese firm Zijin Mining Group, the project is in the construction stage some 65 miles from the city.

Resistance from local communities is a critical factor for mining in Argentina, which has a long history of projects abandoned due to fierce citizen opposition. Even the Fiambalá assembly held roadblocks in 2017 to demand lithium mining information.

Lagoons in the Andes on the Six Thousand Route in Catamarca, near the Tres Quebradas Project / Francisco Uranga

Environmental concerns dominate objections to this activity. Specialists warn that it affects the hydric balance because the process involves extracting brine and exposing it in large pools to evaporate the water.

"The critical factor is water in a desert," explained Pía Marchegiani, a researcher at the Environment and Natural Resources Foundation (FARN, by its Spanish acronym). "The water imbalance salinates the freshwater that people and animals in the area live on."

The first rumors about lithium reached Fiambalá in 2016 when the Canadian company Neo Lithium —acquired by Zijin in 2019— hired some local people for the exploration stage.

"Without informing the population at all, they started working," said Beatriz Parera, a retired elementary school teacher and member of the Fiambalá Despierta assembly. 

Parera and her family have a small 1.5-acre vineyard. They depend on melt water for their business, which comes from the mountains where the salt flats are located. That is why they are concerned about mining's effect.

A halt to the lithium furor would frustrate many in Argentina, but not Parera.

"In the past, we have progressed thanks to our parents' work in the vineyards, but now the future worries me," Parera said. "We used to live peacefully without mining."

Tres Quebradas is one of 38 projects underway in Argentina, at different progress levels. There are currently only two operations in production: Fénix, in Catamarca, and Caucharí-Olaroz, in Jujuy. But 11 are already under construction or at an advanced stage, raising rapid growth expectations.

When Vacazur learned of lithium's existence, he gathered other entrepreneurs in the area and launched a commercial chamber. The first one for indigenous communities in Argentina, he said.

But the companies paid no attention to them. Until Vacazur showed up uninvited to a meeting between the government and mining firm executives. He still remembers the surprise of the executives at his proposal to be their supplier.

"They pointed out to me that we had trucks in precarious conditions," Vacazur said. He admitted that but proposed working together to make things better.

The chamber currently has 62 members, who provide services to mining companies, such as logistics, catering, security, maintenance, and chemical toilets.

"We also want to be part of mining," Vacazur said. "We do not expect to be next to the llamas all our lives so that a tourist comes and takes a picture and gives us a few coins.”