Argentina's federal government has been, for the past year, granting tax breaks and 40-year legal stability to companies selected under its new incentive regime for large investments, known as Rigi. Twolithium projects have qualified for it, providing support during a year of higher price volatility. Argus spoke with Alejandro Moro, chief-executive of Eramine Sudamerica, a subsidiary of France's Eramet, about how Rigi has changed the lithium market, and provided updates on the company's projects in Argentina. Edited highlights follow.
Do you believe that Rigi simplifies the lithium market in Argentina? Can it last beyond this government?
Yes, Rigi greatly simplifies the scenario, especially because of how it was structured.
Since it is formulated as a law, it gives it more stability and makes it less vulnerable to political fluctuations.
If the current government is not re-elected in 2027 and a new one with a different vision takes office, the impact on Rigi would be minimal. Obviously, everything can be modified in the long run, but the Rigi is carrying a lot of momentum, and it is attracting significant investments, with many approved projects.
The Rigi is key for the development of the sector, because even though lithium already existed before it, now there is a legal framework driving it forward. The clear rules provide a sense of security.
How has lithium evolved in Argentina?
Lithium has been produced in Argentina for decades.
For example, Rio Tinto, which used to be FMC at the time, was already operating in the Catamarca province in the 1990s.
They started with small amounts, without today's infrastructure, and are still producing. The big difference is demand.
Lithium used to be mainly used for batteries in phones and computers. Today, we are talking about batteries for electric vehicles and energy storage stations, which are essential to store intermittent renewable sources. A phone might use around 80g of lithium, while a car can require over 40kg. Demand growth has been exponential.
What factors explain the market's current volatility?
The lithium market is still emerging, and that is why it is highly volatile.
Ambitious projections — like the phase-out of combustion vehicles in Europe by 2030 — create expectations, but the reality is that a complete transition still requires time and infrastructure: charging stations, electrical grids and battery recycling systems.
Also, the market is concentrated at the processing stage, with a dominant presence from Asia, especially China, making it sensitive to regulatory decisions and policy changes in that country.
With current lithium prices, are investments still viable?
It really depends on each player's outlook.
Some companies are still investing, like Rio Tinto, which recently bought Arcadium Lithium for $6.7bn. If you do the math, you see they assumed a lithium price of around $15,000 or $16,000 per ton — a value that is hard to justify today, but their bet is long-term. They are convinced the market will grow, even if there is uncertainty about the pace of that growth.
What is Eramine's investment and operational strategy in this volatile context?
We are also betting big. We have invested $1bn in a plant in the middle of the Argentinian highlands, in a remote area, and we are already operating.
We also did it with the conviction that the market will respond in the long term, but it takes patience. You have to understand that this is a young, volatile market, and there will be good years and tough ones, like the current one.
What stage of production are you in, and what are your growth projections?
We are in the full ramp-up stage, meaning we are progressively increasing production until we reach the plant's nominal capacity, which is 24,000t/yr.
We estimate it will take another six to nine months to reach that level. Right now, we are producing at 50-60pc of our capacity. Even if current prices remain the same, we believe we will achieve a positive margin. It will not be enough to immediately recover the entire initial investment, but it will allow us to continue operating with positive cash flow and maintain our long-term strategy.
What are Eramine's expansion plans in Argentina?
For now, Eramine's priority is to ensure a successful ramp-up and reach its nominal capacity within the planned timeline.
All our resources are focused on that goal. Any consideration of a possible expansion will depend on the strategy of the Eramet group, based on the outcome of our current operations and the achievement of the objectives we have set.
