- January 2, 2025
- Posted by: Anish
- Category: Feed
December 2024: Anish Narang, MD, Karavan Advisory Enterprises LLP meeting with H.E. Sr. Hugo Passalacqua, Governor of Misiones, Argentina in Posadas to further trade opportunities.
In 2023/24, the Ministry of Mines identified 30 critical minerals crucial for India’s economic growth and national security. Although the report pointed out that India is entirely dependent on imports for 10 of these minerals, it did not adequately address the more urgent issue of the degree and specifics of reliance on China.
China has identified 173 different minerals, which include 13 energy minerals, 59 metallic minerals, and 95 non-metallic minerals. Nearly 40% of these, especially copper, lead, zinc, nickel, cobalt, lithium, gallium, germanium, and crystalline graphite, saw substantial growth in reserves last year. This increase was driven by an exploration investment of $19.4 billion.
An in-depth examination of import data of 30 critical minerals spanning 2019 to 2024 reveals India’s acute vulnerability to Chinese supplies, particularly for six critical minerals where dependency exceeds 40%: bismuth (85.6%), lithium (82%), silicon (76%), titanium (50.6%), tellurium (48.8%), and graphite (42.4%).
Lithium and Copper, crucial for EV batteries and energy storage, faces processing bottlenecks, despite alternative raw material sources. China produces only 8% of the world’s raw lithium but has 72% of the world’s processing capacity.
Lithium’s light weight and high energy density make it an essential component of battery production. According to the US Geological Survey, 87% of the world’s supply goes towards battery manufacturing – with over 60% of the total supply just for electric vehicles (EVs).
Lithium and Copper Investments in Argentina:
Rio Tinto Group plans to invest $2.5 billion in a new lithium mine in Argentina in a win for President Javier Milei’s efforts to deregulate the country’s economy and lure foreign investment.
The UK company plans to build a processing plant at the Rincon mine with an annual capacity of 60,000 metric tons of lithium carbonate. Work on the facility will start in the middle of next year. International investors are also trying to dig Argentina’s first major copper pits. Rio has exposure to the country’s copper riches through a stake held by its Nuton venture in Los Azules, which recently passed a key permitting step and must now raise funds to build the mine.
South America’s second-largest economy is showing signs of improvement after a deep recession. Argentina’s economy expanded more than expected in October, continuing to show signs of recovery after surpassing growth forecasts in the third quarter too.
Economists surveyed by Argentina’s central bank estimate gross domestic product will contract 3% this year, reversed by 4.2% growth in 2025.
Following President Milei’s election just over a year ago, Argentine lawmakers approved his marquee incentives program, known by its Spanish acronym RIGI, featuring tax, currency and trade benefits for energy and mining. The measures are enshrined in law for the next 30 years.
India- Argentina Trade relations:
Indian and Argentina upgraded their ties to a Strategic Partnership in 2019, and in November 2024, Prime Minister Narendra Modi and President Milei held their first bilateral meeting on the sidelines of the G20 Summit in Rio de Janeiro, Brazil. This meeting marked a significant step in further strengthening the bilateral ties between the two nations.
Trade between Argentina and India has reached unprecedented levels, with a trade volume of $4.6 billion. Argentina has become a key supplier of soybean and sunflower oil to India, essential for Indian food security. India is one of Argentina’s top export partners, and Argentina is now the leading provider of soybean oil to India.
The presence of Argentine IT firm Globant in Pune and UPL Group’s operations in Argentina highlights the strong economic ties between the two countries.
In a recent event, Argentine Ambassador to India, Mr. Mariano A. Caucino described that President Milei’s administration is focused on deregulating the economy to eliminate obstacles to production and investment. Argentina is inviting Indian businesses to invest in various sectors, including energy, mining, technology, and agriculture. The newly approved Large Investments Incentive Regime law offers significant benefits to foreign investors, providing stability by freezing legal and tax conditions for the next 40 years.
To conclude, India is taking a multi-faceted approach to lessen its reliance on China. The government has created KABIL, a joint venture of three state-owned companies, to acquire overseas mineral assets. India has also joined initiatives such as the Minerals Security Partnership and the Critical Raw Materials Club to diversify its supply sources and bolster partnerships. In 2023/24, Indian mining companies began operations in Catamarca, Argentina, exploring lithium, copper, and gold—critical resources for India’s electric vehicle industry.