Can Czech lithium compete globally? Argentina aims to double output by 2030

Expectations of further growth in demand for batteries, whether from electric vehicle manufacturers or developers of stationary battery storage facilities, are an attractive factor for lithium miners. Major plans to increase extraction of this currently critical raw material are evident not only in the Czech Republic; new projects are also being developed abroad. Argentina is one example, with ambitions to strengthen its position on the global market. Lithium production in this South American country is expected to more than double by the end of this decade.

Lithium is currently still a critical raw material for battery production, with batteries increasingly being used in road transport and the power sector. It is no surprise that a number of countries and companies around the world are seeking new lithium production capacity.

These projects continue despite the significant fall in lithium prices in recent years, which have experienced considerable volatility in recent years – while a tonne of lithium traded for more than $80,000 at the end of 2022, the price fell to as little as one-tenth of that value in the middle of last year. Since the start of this year, however, prices have partially recovered to above $20,000 per tonne.

Argentina has considerable ambitions in lithium mining and, in cooperation with foreign companies, plans to open eight new mining operations by the end of this decade. According to Argus, the new production capacity should raise Argentina's total mining capacity to 409,000 tonnes of lithium carbonate within four years. This represents an increase to more than double the current 159,000 tonnes.

Two of the eight new projects are expected to begin operations within the next few months. These are Galan Lithium's Hombre Muerto West project, with production capacity of 8,000 tonnes per year, and Rio Tinto's Sal de Vida project, with annual capacity of 15,000 tonnes. Rio Tinto also plans to commission Argentina's largest mining project, Rincón, in 2028, with total capacity of 60,000 tonnes per year. The remaining five projects are then expected to be completed in 2029 and 2030.

Czech Republic also plans to extract this strategic raw material

The possibility of starting lithium mining has also long been discussed on the Czech market. According to a feasibility study, there are no technological barriers to lithium mining at Cínovec in the Ore Mountains and to a processing plant in Prunéřov, in the Chomutov region. According to the ČEZ Group, the study confirmed that 3.2 million tonnes of ore per year can be mined at Cínovec, producing approximately 37,000 tonnes of lithium carbonate.

This would place the Czech Republic among significant lithium producers, although in terms of total volume it would still amount to roughly one-tenth of the increase in production in Argentina. The question therefore remains how lithium prices will develop in the coming years, in view of changes in both supply and demand.