“We must consider the lithium as a strategic resource“, President Alberto Fernández publicly slipped for the first time in a dissertation during his tour of New York a little less than a month ago. The statement went unnoticed by the public – students and members of the traditional New York university community The New School – but it turns out a key and complex issue (when not) for the economic development of the country.
The complexity lies in the fact that unlike Bolivia and Chile, neighbors of the famous lithium triangle that concentrates 58 percent of the world’s reserves of the mineral, Argentina has a federal regime for the regulation and promotion of mining activity through which the provinces have control of mining resources and the competence to award concessions to explore and exploit them, while the Nation receives most of the tax resources linked to the activity and productive policy and science and technology instruments.
“Es It is politically unlikely that the concessions regime that derives from the original domain of the provinces over natural resources will be modified. ratified by the 1994 Constitution. The challenge is then to coordinate policies between different levels of government in order to address tensions and imbalances,” says a document published by the think tank Meetings product of specific research on the subject. It would not be the first time that the President takes an exhaustive position on an issue that he later does not push. From the government they did not speak once more, and they do not accuse that there is a plan for that purpose.
Three sad tensions
The work carried out by researchers from the Fundar team Carlos Freytes, Martín Obaya and Víctor Delbuono highlights three main tensions that arise from the mining governance regime for the implementation of productive development policies around lithium: division of responsibilities between the national and provincial levels; the focus of science and technology policy on the most developed links in the value chain and the current productive reality of lithium in the country; and governance socio-environmental of lithium.
The provinces have within their reach the conditions that companies are required to access the exploitation rights over the resource. “Hiring labor and buying local within the limits of each province creates entry barriers for companies from other provinces and generates problems of scale for the development of suppliers with more complex productive and technological capacities,” they say from Fundar.
On the other hand, the tax structure of lithium mining, concentrated in the Nation, might be a source of financing to develop capacities, but it lacks progressive instruments to tax income or extraordinary prices. The Mining Investment Law establishes a cap on collection by the provinces, while the taxes collected by the Nation on the activity are not specifically allocated, which limits their link with productive development policies. In the case of Chile, for example, part of the proceeds from lithium mining is used to finance R&D activities for the processing and transformation of the resource.
“Most of the human and budgetary resources of the Science and Technology (through Conicet and the I+D+i Agency) focuses on the downstream segment, for example, in the development of lithium ion battery technology. This is a segment in which there are significant financial, technological and commercial barriers to the entry of Argentine companies,” says the Fundar document, which ensures that there are significant areas of vacancy in crucial issues for the production of lithium from salt flats, such as such as the development of more sustainable production methods, the impact on the hydrological balance of the salt flats, or the management of socio-environmental demands.
Separate paragraph deserve the ecological imbalances generated by overconsumption of water in extremely arid territories. “Argentina is the fourth country with the highest number of mining socio-environmental conflicts following Mexico, Chile and Peru. In total, more than 50% of mining projects are canceled or temporarily suspended due to social resistance,” they say from Fundar.
In a special document on this specific topic prepared by Fundar María Victoria Arias Mahiques researchers, Malena Galuccio and Carlos Freytes, they assure that there is no uniform strategy in the management of its resources. The instances of public participation and their articulation with the process of free, prior and informed consultation (FPIC), the environmental impact assessment procedure (EIA) and its effective implementation “present gaps between the different jurisdictions.”
“The approval of EIA has been consolidated as a mechanism to negotiate with mining companies the conditions of their operationssuch as the contracting of goods, services and provincial employment”, he assures. The other critical axis in this sense is the relationship with the native communities and peoples. The mining activity of the high Andean ecosystems overlaps with territories used and occupied by local populations more than 10,000 years ago.
