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US Tariffs |
Tariff Exemptions Favor Lithium Raw Materials, Not Finished Batteries
The US has exempted lithium carbonate and lithium hydroxide from its newly announced tariffs, creating a possible boon for Argentina's lithium sector. While raw lithium salts escape extra duties, finished battery imports face steep tariffs: 64.9% for China, 24% for Japan, and 25% for South Korea.
This disparity aligns with US efforts to localize battery manufacturing, a movement accelerated by the Inflation Reduction Act under President Biden. With at least 10 new battery factories coming online in the US this year, the demand for lithium raw materials is surging.
Argentina’s Brine Lithium May Fill the US Supply Gap
The US faces a bottleneck in domestic lithium production and processing. Currently, Albemarle’s Silver Peak mine is the only active operation, producing just 5,000t/yr of technical-grade lithium carbonate, which lacks the purity needed for EV batteries.
As a result, the US will increasingly depend on lithium imports, especially battery-grade salts. Argentina, with its low-cost brine operations, may become a preferred supplier if its projects can consistently meet battery-grade specifications.
Brine operations, while slower to ramp up than hard-rock mining, are cheaper to operate and typically more cost-competitive over time. Argentina also offers a low 3% royalty tax, compared to Chile's 40% ceiling, enhancing its competitiveness.
Global Lithium Supply Chains May Shift Toward South America
Countries like Australia and Brazil, which mine spodumene, rely heavily on China for conversion, placing them in a higher tariff category. These spodumene-dependent nations now face at least 20% US tariffs due to their reliance on Chinese refining infrastructure.
Meanwhile, Argentina’s direct-to-battery-grade production strategy may give it an edge.
“All of Argentina’s lithium projects go to battery grade,” said Daniel Gonzalez, Argentina’s vice-minister of energy and mining.
If Argentina proves its capability at scale, the country could secure a dominant role in North America's clean energy transition, especially as the US reorients trade relationships in critical minerals.
The Metalnomist Commentary
With tariffs redrawing global battery supply lines, Argentina’s brine-based lithium sector is now a strategic wildcard. If proven at scale, it could shift market share away from spodumene producers tied to China—and bring Latin America deeper into the heart of US industrial planning.
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