South American Countries Including Chile and Argentina Gather
South American countries, which hold more than half of the world's lithium reserves?the key raw material for electric vehicles and batteries?are reportedly preparing to produce batteries and electric vehicles.
On the 5th (local time), Fernanda Avila, Argentina's Deputy Minister of Minerals, stated that Argentina, Chile, Bolivia, and Brazil will cooperate to process the lithium they mine into battery materials and begin manufacturing batteries and electric vehicles, Bloomberg reported.
Bloomberg analyzed that this movement by resource-rich countries reflects a trend to promote economic growth and increase income through high value-added activities rather than merely supplying raw materials. Chile, Argentina, and Bolivia hold 60% of the world's lithium reserves.
Until now, South America has not produced high value-added products. However, Bloomberg observed that political will, technological changes, and geopolitical tensions could support such efforts.
Due to the war in Ukraine and global supply chain concerns over dependence on China, more countries are seeking to develop domestic industries. The U.S. Inflation Reduction Act (IRA) is also accelerating this trend. According to IRA regulations, to receive tax credit benefits, more than 50% of the parts used in battery production must be manufactured or assembled in North America, and 40% of the critical minerals used in batteries must be mined or processed in the U.S. or countries that have free trade agreements (FTA) with the U.S.
Argentina has argued that the IRA is necessary despite not having an FTA with the U.S.
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