Delegation to Buenos Aires
USA is courting Argentina – also because of lithium
December 10, 2023, 8:49 a.m
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Argentina is once again experiencing a severe economic crisis – and the country has large reserves of lithium, the key raw material for battery construction. A Biden advisor is visiting Buenos Aires and is promising cooperation that could go beyond simply supplying the light metal.
A US delegation has pledged its support to newly elected Argentine President Javier Milei in talks with the International Monetary Fund (IMF) and the development of the lithium sector at a meeting in Buenos Aires. “I think the number one priority is the economic challenges facing Argentina,” Juan Gonzalez, adviser to US President Joe Biden and senior director of the National Security Council for the Western Hemisphere, told Reuters.
Gonzales said the talks were “very positive” and focused on the country’s struggling economy. “Argentina must solve these problems,” he said, adding that the grain-producing country also needs to reach an agreement on its economic plan with IMF staff. The current IMF program, which replaced a failed 2018 agreement, had become increasingly unsteady as Argentina’s economic crisis deepened.
Argentina could move up the value chain
Another topic discussed by the US delegation was lithium. According to Gonzalez, the US hopes that Argentina will soon benefit from the US Inflation Reduction Act (IRA), which is currently not the case since Argentina is not a partner in the Free Trade Agreement (FTA). The US is ready to help Argentina, the world’s fourth-largest producer of lithium, expand production of the metal, which is important for electric batteries. “Certainly Argentina is a source of lithium, but there is no reason why Argentina shouldn’t also be refining lithium and moving up the value chain, and we want to help with that,” Gonzales said.
Argentina is currently struggling with inflation of almost 150 percent, while over two-fifths of the population live in poverty. The IMF’s $44 billion program is out of control, the central bank’s net reserves are deep in the red and a recession is looming. According to experts, these conditions apparently also helped the ultra-right and populist economist Javier Milei to the highest state office. Milei is scheduled to be sworn in on Sunday.