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(Bloomberg) — The European Union is working on agreements with Argentina and Chile to expand access to key minerals and metals like lithium needed for electric vehicle batteries as part of its goal of creating a less carbon-intensive economy.
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Preliminary memorandums of understanding could be signed within the next four months, according to the European Commission, the EU’s executive body, adding that further partnerships are possible in South America. and more.
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This is the EU’s latest effort to ensure access to resources critical to digital transformation and clean energy, while reducing reliance on a small number of suppliers. China. It follows agreements with Canada, Ukraine, Namibia and Kazakhstan. Brussels is also negotiating with Norway and Greenland.
“The strategic partnership will enable both sides to jointly develop investments in sustainable and resilient raw materials value chains, while strengthening collaboration specifically on research and innovation, ‘ a spokesman for the commission said on Wednesday.
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A spokesman for Argentina’s Energy Secretariat said the government is drafting a memorandum of understanding with the EU to help the country develop a sustainable metal exploration and processing industry. According to a draft seen by Bloomberg, it includes 42 raw materials.
Demand for lithium, of which Argentina is a major supplier, is expected to grow 12 times by 2030 and 20 times by 2050. The EU has agreed to ban the sale of new cars that emit C02 by 2035 when bet on electric cars.
The preliminary deal is likely to come before Argentina’s presidential election in October, where the ruling Peronist coalition faces long-term difficulties and it is unclear what lithium policy the new government will implement.
South America’s second-largest economy is also seeking special status to qualify for subsidies under the U.S. Inflation Reduction Act, which allows U.S. automakers to use their lithium.
Chile is the world’s second-largest supplier of lithium after Australia, and most of its output is now handled by China, where costs are low. German Chancellor Olaf Scholz met Chilean President Gabriel Boric in Santiago earlier this year in an effort to secure additional supplies.
—With the assistance of Jonathan Gilbert.
