EU and Argentina sign critical minerals collaboration agreement
One of the world’s biggest electric vehicle (EV) markets has joined forces with one of largest holders of the critical minerals needed to fuel that modern, clean energy transport sector.
The European Union (EU) has moved to shore up its clean energy needs with the signing of a memorandum of understanding (MoU) with the Argentinian government to collaborate on future critical minerals supplies.
EU president Ursula von der Leyen and Argentinian president Alberto Fernández have signed the ground-breaking agreement to work together on critical metal supply chains.
Impact of the Partnership
Speaking in Buenos Aires after the signing ceremony, president von der Leyen, said the critical raw materials partnership was a major step forward that will benefit for both parties.
She also forecast that European demand for lithium is expected to be 12 times greater by 2030.
“I think it is important to see that, for example on lithium, we will help develop value chains that definitely go beyond extraction. Because we think it is so important that the added value in the processing value chain stays locally and in the region.”
Local benefits and job creation
The EU leader said the deal will also lead to job creation in and new business opportunities in Argentina.
“Lithium plays a big role because it is essential to power clean technologies. It is basically everywhere: it is in batteries; it is in wind turbines. And as the whole world is embarking on these clean technologies to fight climate change, the demand for lithium will grow significantly, not only in Latin America but across the whole world.”
She said Argentina has a real opportunity to develop its critical minerals sector with the right value chains.
The president added that the MoU will make crucial investment flows possible, particularly in high-quality, sustainable infrastructure that can give a significant boost to the Argentinian economy.
“You are on your way to become a regional hub for renewables, with the support of Global Gateway. And I think this is good news for both of us because it will accelerate your clean energy transition, it will create jobs here in Argentina. And of course, it is also of high interest for the European Union, as we need a reliable clean energy supplier.”
EU’s Global Gateway investment plan
The president added that the critical minerals collaboration comes under the EU’s Global Gateway investment plan for infrastructure abroad.
“Through Global Gateway, the European Union will invest EUR10 billion (A$15.6 billion) in Latin America and the Caribbean. This will be complemented by additional contributions from the Member States bilaterally and of course by private sector investment.”
“Global Gateway creates a conducive environment for private investments from across Europe in Latina America and the Caribbean, and specifically here in Argentina,” she added.
Argentina’s massive lithium reserves
Argentina holds some of world’s largest lithium holdings, with approximately 19 million tonnes of identified lithium reserves.
The nation’s lithium sector reached an estimated US$1.5 billion (A$2.1 billion) in 2022. It is forecast that investments would reach more than US$5 billion (A$7.2 billion in the coming years.
Revenue from the European EV market is projected to reach US$164 billion (A$238.2 billion) in 2023 and grow at annual growth rate (CAGR 2023-2028) of 11.99%.
In 2022, the number of these fully electric passenger cars in EU countries increased by 58% compared to 2021 – from 1.9 million to 3.1 million. Between 2019 and 2022 they soared by more than 400%.
New electric passenger car registration in Europe for Q1 2023 hit 1,177,637 million and market unit sales are expected to reach 4.83m vehicles in 2028.