Background and Relevance of the Agreement
France and Argentina have signed a framework agreement on critical minerals, including lithium, where Argentina holds the third-largest global reserves. This move aims to promote funding and investments in this strategic sector, vital for the energy transition.
Argentina possesses the third-largest global lithium reserves, according to data from the United States Geological Survey. In 2023, it ranked as the fourth-largest producer of lithium worldwide, following Australia, Chile, and China.
Alongside Bolivia and Chile, Argentina forms part of the “lithium triangle,” a region potentially holding more than half of the world’s lithium stocks, according to experts. Lithium is crucial for the energy transition as it plays a key role in electric vehicle batteries and smartphones.
Details of the Agreement
The “memorandum of understanding,” signed in Buenos Aires by French Minister for Trade, Laurent Saint-Martin, and Argentine Secretary of Mines, Luis Lucero, aims to make the mining sector a “strategic priority” in Franco-Argentine relations, stated Saint-Martin.
Lucero described it as a “roadmap” and an “instrument that opens up a field of cooperation,” which requires “follow-up through bilateral dialogue to establish concrete measures.”
The agreement seeks to “elevate the bilateral mineral partnership at a political level, taking into account the critical challenges that critical minerals pose for energy solutions,” Saint-Martin explained.
It also aims to “accelerate the deployment of investment projects by French companies in the coming months and years, and strengthen the mobilization of public cooperation instruments for project financing,” he added.
Investment Trends and Future Prospects
French investments in Argentina saw a 43% year-on-year increase in 2024, reaching $7.6 billion across all sectors combined. This made France the fifth-largest foreign investor in the South American country.
The mining sector stood out in this growth, with $850 million allocated to the inauguration in 2024 of the first direct lithium extraction plant by the Eramet mining group in Argentina’s Salta province (northwest).
“Argentina has first-rate mineral resources in terms of quality, quantity, and diversity and will play a crucial role in the global energy transition,” Saint-Martin opined.
Argentina has already signed other memorandums of understanding for cooperation on critical minerals, with the United States in August 2024 and the United Arab Emirates in February.
Key Questions and Answers
- What is the purpose of the agreement between France and Argentina? The agreement aims to promote funding and investments in the strategic mining sector, crucial for the energy transition, with a focus on critical minerals like lithium.
- Why is Argentina significant in the global lithium market? Argentina holds the third-largest global lithium reserves and is the fourth-largest producer. It’s part of the “lithium triangle,” a region potentially holding more than half of the world’s lithium stocks.
- What does the agreement seek to achieve? The agreement aims to elevate the bilateral mineral partnership, accelerate investment deployment, and strengthen public cooperation for project financing.
- How have French investments in Argentina been growing? French investments in Argentina increased by 43% year-on-year in 2024, reaching $7.6 billion across all sectors, with the mining sector showing significant growth.
