The Latin American Report # 35

_{Original Source (Edited wih Canva).}

Hello, hivers. In today's report we focus the spotlight on positive business developments in the region, specifically zooming in on the prospects for lithium mining in Argentina and Bolivia. In addition, we review the installation of an electric car factory in Brazil, and close with our usual description of the performance of the main currencies and markets in the region. So, let me ride on the reporting task now.

The battle for Latin American lithium

It has been a long time since I read anything new about Bolivia's lithium strategy, being in fact the world leader in terms of potential resources (not in terms of reserves, which are the potential resources duly measured; Chile, Argentina and Brazil, in that order, are the three countries in the region that make up the Top 10 countries in the world with the largest number of reserves). Today it was announced the signing of an agreement between Chinese Citic Guoan Group, a subsidiary of the Russian company ROSATOM, and the Bolivian state-owned company YLB (for Bolivian Lithium Deposits, in Spanish) through which the Asian companies will invest a little over 1,400 million dollars for the installation of two plants for the production and export —starting in 2025— of some 50,000 metric tons per year of the alkaline metal, extracted from salt flats located in the southwest of the country.

The intention is to better position the Andean country in a very lucrative market due to the strategic nature of the industry. Earlier this year another Chinese company (Contemporary Amperex Technology, CATL) had partnered with the Bolivian Government to exploit Uyuni's salt flat, recognized as the largest in the world, and located about 400 km from the country's capital; on this basis, in the middle of this month CATL confirmed an investment similar to the one announced today, through which it would also be providing —from two plants— 50,000 metric tons of battery-grade lithium carbonate each year. In general about China's strategy with Bolivian lithium, I recommend reading this very thorough report.

_{Bolivia secures significant financing to monetize its potentially huge lithium reserves (source).}

Meanwhile, in Argentina...

South Korea's Posco announced yesterday, Wednesday, the investment of some 800 million dollars in the "Sal de Oro" project, that is being deployed in the imposing Salar del Hombre Muerto (Dead Man's Salt Flat in English). The company previously invested a similar amount to install two commercial plants, one for lithium phosphate and the other for lithium hydroxide. With this new bet, the construction of a lithium carbonate production plant is foreseen, which should provide some 23,000 metric tons per year (the return per dollar invested does not differ much from the projects presented above in Bolivia, although there it is slightly higher). The Albiceleste nation is more developed in the production phase than Bolivia, with a greater diversification of investors in terms of countries of origin (companies from Canada, the United States and Australia are also operating), and should soon take over the third position in the ranking of world producers.

_{Groundbreaking ceremony of the new construction phase in the Dead Man's Salt Flat (source)}

Brazil

In Brazil, the electric car manufacturer BYD plans to make official in the first days of July the announcement of the construction of a new plant in Salvador, in the state of Bahia. The company's president for the Americas met with Lula da Silva yesterday, and reportedly discussed with the president the need for greater incentives for production and consumption (the facility will be located where a U.S. Ford plant used to be). The total planned investment —which includes two other plants— amounts to about US$ 620 million. BYD already manufactures electric buses and batteries for them in two factories in the state of Amazonas. Lula is reportedly evaluating the granting of credits through the state-owned National Bank for Economic and Social Development to respond to the demands of the market in general and investors in particular.

_{Presentation of a BYD electric car in Brazil, at a cost of around US$31,000 (source).}

Finance

With the exception of the Brazilian real, which was able to recover initial losses and close with a timid 0.1% gain, the rest of the currencies that make up the basket of six to measure the region's financial health against the dollar ended in the red; in Peru there was a holiday. The day was tinged by new statements made by the Chairman of the Fed —Jerome Powell—, this time in Spain, where he once again pointed to new interest rate hikes, which added to economic data in the United States regarding employment, where initial applications for state unemployment benefits fell by 26,000; forecasts pointed to a smaller drop. All the main indexes associated with the stock exchanges showed gains at the close.

Countries	Local currency balance	Local stock index balance
Colombia	-1.14%	+0.32% (MSCI COLCAP)
México	-0.31%	+0.19% (S&P/BMV IPC)
Perú	closed	closed
Argentina	-0.14%	+1.67% (S&P Merval)
Chile	-0.14%	+1.28% (IPSA)
Brazil	+0.1%	+1.58% (Bovespa)

_{Daily balance of main currencies and stock indexes in Latin America ( Source).}

This is all for our thirty-fifth report. I have referenced the sources dynamically in the text, and remember you can learn how and where to follow the LATAM trail news by reading my work here. Have a nice day.

_{Edited with Canva.}