Argentina lithium deal will power up Indian auto sector, envoy Gobbi says

New Delhi this month initiated its worldwide quest for lithium–essential for electric vehicle batteries–by signing a $24 million deal through KABIL, a joint venture of Indian state-run mining firms, with Argentina’s state-owned Camyen for five blocks in Catamarca province.

India stands to gain consistent lithium supply from Argentina with this deal, which will be a game-changer for the domestic automobile industry, Argentinian envoy Hugo Javier Gobbi said in an interview.

The new Argentinian administration under President Javier Milei is highly supportive of business-friendly policies and will continue supporting such global collaborations, recognizing their importance in the larger economic context, Gobbi added.

As his tenure as ambassador in India draws to a close, Gobbi also reflected on his time in the country and mentioned ongoing discussions with the Argentine Football Association about a friendly match in India, potentially featuring football icon Lionel Messi.

Edited excerpt (questions and responses have been edited and condensed):

Could you elaborate on the significance of the recent joint venture between state-run miners from India and Argentina for lithium exploration and mining in Catamarca, especially in light of India’s pursuit of electric vehicle battery technology?

It is a big step in a process which has been going on for a few years. It will allow Kabil to participate in the last phase of exploration at five key sites in Argentina, rich in lithium resources. This exploration is set to transition into the production phase within two to three years, requiring substantial investment due to the typical duration of mining projects, which ranges from five to ten years.

Once production commences, India stands to gain a consistent lithium supply from Argentina, a region part of the global ‘lithium triangle.’ This will be a game-changer for India’s automobile industry, especially for electric vehicle battery production. The strategic importance of lithium as a mineral cannot be overstated in this context.

The prospect of this venture extends beyond lithium. It opens avenues for broader industrial cooperation and joint ventures between India and Argentina. Given Argentina’s significant automobile industry and India’s prowess as a major exporter of vehicles, there’s a promising potential for a reciprocal trade relationship. This partnership could extend to other sectors such as renewable energy, including wind and solar, further solidifying the economic ties between our two nations.

Are there ongoing discussions for similar ventures involving private mining companies?

Yes, there is growing interest in lithium investments from the private sector globally. This interest isn’t just limited to private miners but extends to various industries, notably the automobile sector, which is keen on securing a steady supply of lithium. We’re witnessing significant investments already underway from countries like France, South Korea, and China. These investments represent a broader trend of private sector involvement in lithium mining. Our approach is to encourage and facilitate investment from as many companies as are willing to engage in the mining and resource development sectors. The aim is to create a robust and diverse ecosystem for lithium production, catering to the rising global demand.

Have any Indian conglomerates shown interest in engaging in the mining sector in Argentina, particularly for lithium exploration and mining?

There’s been a noticeable interest in this sector, but such ventures are complex and take time to evolve. We initiated discussions for Kabil before the pandemic, which caused some delays, but resumed in late 2021, leading to the agreement we see today. Mining investments, especially in lithium, are intricate and long-term undertakings. The mines in question are actually saline lagoons situated in high-altitude areas, demanding significant logistical and engineering efforts, including the establishment of energy sources, roads, and worker accommodations. Additionally, the extraction of lithium from saline water is a highly technical process, requiring extensive chemical expertise.

It’s important to note that while there’s interest from the private sector, the involvement of a state-run enterprise like Kabil is critical, especially since Kabil itself does not possess an industrial base for lithium. Their role will likely be more about facilitating lithium supply to the Indian private sector, thereby playing a key role in the broader ecosystem of lithium production and supply chain.

Considering the regime change in Argentina, where President Javier Milei, a libertarian who advocates for a free-market model, has come to power, is there a threat of policy changes impacting deals such as that in Catamarca, where state-owned companies are involved?

It’s important to recognize that the new administration, under President Milei, is highly supportive of investment and business-friendly policies. While it’s true that Camyen is a state-owned company and the government is leaning towards a more free-market approach, these kinds of strategic partnerships, particularly in sectors like mining, are often insulated from abrupt policy shifts. Moreover, in Argentina, the resources are owned by the state or province. In this case, Camyen is owned by Catamarca.

The government’s approach also is more nuanced, aiming to balance its pro-business stance with the strategic importance of state-run enterprises in certain sectors. The recent economic measures, while challenging, are part of broader efforts to stabilize and strengthen the economy. These steps are unlikely to jeopardize long-term strategic agreements, especially those that are crucial for the country’s economic development and international partnerships. In essence, the administration is likely to continue supporting such collaborations, recognizing their importance in the larger economic context.

How are bilateral defense ties progressing, especially considering the high-level interactions between defense officials of both countries?

Defense cooperation is a strategic domain, akin to our ventures in lithium. It’s aimed at forging long-term, enduring links. The progression is notable – from almost negligible interaction to significant advancements today. However, perspectives on this progress vary. Optimists may overstate it, while pessimists might underplay it. But, irrespective of these views, these ties are crucial for long-term strategic partnerships. Recently, our military attache office was reopened, signaling renewed and regular interactions between Indian and Argentine defense forces. Our collaborations extend to various sectors, including participation in Argentina’s Antarctic program and interests in areas like helicopter technology. The visits by high-level defense officials, including the minister of defense and the chief of staff, underscore the growing importance and momentum of this relationship. Our strategic ties in defense are not only strengthening but are also key for the future trajectory of our bilateral relations.

Have India and Argentina signed any military agreements?

Negotiations are indeed in progress and are quite complex. Argentine pilots have tested Indian aircraft and were impressed with their capabilities. Progress has been more rapid in areas like helicopter maintenance, where contracts have been signed. Interest in the BrahMos missile is also high. These negotiations take time and are part of a broader strategic relationship that is continuously evolving. So, while there is no immediate conclusion, the trajectory is positive, and we expect these relationships to grow and bear fruit in the future.

Could you shed light on Argentina’s decision to withdraw from BRICS?

Argentina’s decision regarding BRICS is made in Buenos Aires and reflects our current macroeconomic challenges. While we have expressed gratitude to BRICS members for considering our participation, the decision to not join at this time is due to the efforts and conditions required. However, this should not be interpreted negatively. Argentina aims to strengthen ties with all BRICS nations, as evidenced by our significant bilateral relations with countries like Brazil and China, and the growing trade partnership with India. The government’s focus is on stabilizing our economy and managing inflation. We value the support from BRICS nations, especially India, and remain committed to developing strong economic and political relationships with each member nation.

As your ambassadorial term in India comes to an end, what are your reflections on the India-Argentina relationship? Do you see any scope for improving people to people ties?

As my tenure concludes, I look back with a sense of accomplishment at the strengthened bilateral and multilateral relationships between our countries. The incoming ambassador, I believe, will carry forward this momentum with equal enthusiasm. We’ve worked hard to enhance ties in various domains, including G20 collaborations. I’ve developed a deep affection for India and have strived to bolster our connections. The new ambassador will undoubtedly continue to advance our relationship further in various sectors.

A lot of work is being done on both sides to boost people-to-people ties. Argentinians are crazy about yoga. People there are spiritually oriented and look towards India because of its cultural heritage. Also, Indians love Argentinian football.

What are the prospects of football icon Lionel Messi visiting India?

Messi has contracts and it is not easy, but the prospect is exciting. Discussions have been ongoing with the Argentine Football Association, and the idea of the national team, including Messi, participating in a friendly match in India is on the table. But those things take a long time. While logistical challenges exist due to the distance, the enthusiasm and involvement from Indian companies with the Argentine Football Association bode well for this possibility and it will come through.