Argentina, Chile and Peru have created the Latin American Chamber of Lithium (CALBAMERICA) with the goal of creating a transparent market for the mineral to secure fair and stable prices in the region, similar to what OPEC does with oil.
The organization gathers professional technicians and SME entrepreneurs from Argentina and Peru, as well as the Chilean Chamber of Mining. It also seeks to invite Mexico, Bolivia and Brazil to join. The chamber seeks to set lithium prices with the creation of a regional market, an index of lithium value and the creation of contract models. The chamber was created and is currently led by Pablo Rutigliano, who has 20 years of experience in the stock market in Argentina. He founded the Argentinan Chamber of Lithium and promoted the creation of a lithium cryptocurrency, along with lithium chambers in producing countries.
Rutigliano said that the sector in the region is dominated by big multinational companies that leave little room for SMEs and “embryonic” projects. He stressed that some companies and governments do not recognize lithium as a commodity and do not establish minimal reference prices in contracts between privates, which prevents the market from fixing a price and leads lithium to be industrialized beyond the borders of producing countries.
According to Rutigliano, the reference prices shared by the London Metal Exchange mainly come from the contracts among privates in China and other Asian countries, where the main battery producers are located. Those prices do not apply in Latin America as few companies fix prices to pay fewer taxes.
Rutigliano has also commented on the recent nationalization of the lithium industry in Mexico, arguing this will be a detriment to investment. According to him, open markets are necessary but with due regulation. “I am not pro lithium nationalization, I support the creation of a market where everyone can participate in establishing reference prices and in the exploitation and transformation of raw materials in the region,” he added.
According to the US Geological Survey, Chile has 44 percent of the world’s lithium reserves. Together with Argentina and Bolivia, the countries form what is known as the “Lithium Triangle,” which represents 55 percent of the world’s reserves. In terms of prices, in early 2021, the lithium equivalent ton was valued at US$6,750. Currently, the price has reached US$75,000 driven by the demand for batteries and electric vehicles.