Major Argentina Lithium deal signals growing demand from EV manufacturers
The global race for lithium, fuelled by the surge in electric vehicle (EV) demand, has positioned Argentina as a key player in the transition towards cleaner energy technologies. Buoyed by a new political leadership that is emphasising investment-friendly policies, the South American country’s rise to the forefront of lithium production recently got a major boost with one of the world’s leading automakers.
The US$90 million in ARS$ peso equivalent investment is a strategic move by Stellantis N.V. to secure potential supplies of lithium, a critical component for EV batteries.
The deal involves an offtake agreement that allows Peugeot Citroen Argentina S.A., a subsidiary of Stellantis N.V. (“Stellantis”) to purchase up to 15,000 tonnes of future lithium production annually for seven years from Argentina Lithium’s subsidiary, Argentina Litio y Energia S.A. (“ALE”)— along with an option to extend — to potentially help address the looming lithium shortage and the rapidly growing demand from the EV sector. It also offers Stellantis a 19.9% stake in Argentina Lithium’s Argentine subsidiary (convertible into a 19.9% of the parent company).
“Stellantis was inspired to invest in our company to help secure its supply lines as automotive producers have huge requirements for lithium in the coming years. It reflects a forward-thinking approach by the industry,” said Miles Rideout, Vice President of Exploration for Argentina Lithium & Energy.
“We have a mandate from Stellantis to get our projects through the exploration stage to resource assessment and, if positive, development as quickly as we can without overriding concerns about how to finance that work,” said Rideout, who has decades of experience working with many of the most successful exploration teams in South America.
