Industry Trend Analysis - Lithium Triangle: Top Companies To Dominate Landscape - MAY 2016


BMI View: The ' Lithium Triangle ' in Argentina, Chile and, to a lesser extent, Bolivi a , will see r ising investment in new projects spurred by expected price gains over the next few years. The lithium industry in Latin America will also see consolidation , mergers and acquisitions as the top three lithium produc ing companies look to maintain market share.

Key lithium sectors in Latin America will experience solid investment and production growth, supported by increasingly open economic policies and a tightening global lithium market pushing prices up over the coming years. Improving (Argentina) and stable (Chile) business environments will attract more investment than Bolivia, the third country of the 'Lithium Triangle,' where complex regulations, underdeveloped infrastructure and high risk of resource nationalism will deter investment ( see: ' Challenging Operational Environment To Limit New Entrants ' , December 3 0 , 2015). In Chile, already the second largest global lithium producer, the government will continue to sell deposits, including two salt flats owned by state-run copper miner Codelco, looking to private-public partnerships to develop the industry.

In addition to a stronger investment environment than Bolivia, Chile's dry desert climate is also preferable to that of its rainy neighbour for lithium mining. Argentina will continue to make strides towards becoming a stable business environment. For instance, in February, newly elected Argentine President Mauricio Macri announced an end to a 5.0% tax on mining and energy companies, part of his administration's effort to liberalise the market and encourage foreign investment ( see: ' Debt Deal Will Open Door For Foreign Investors ' , March 1).

Chile To Remain Best Lithium Bet
Global Lithium Production By Country (%), 2015
Source: USGS

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