The pro China government of this country has suddenly stepped down! Lithium carbonate or affected!



The pro China government of this country has suddenly stepped down! Lithium carbonate or affected!

On November 19th 2023 local time, extreme right-wing candidate Javier Milei won the Argentine presidential election with a vote rate of nearly 56%, exceeding the Argentine presidential standard of 50%.

Miley's competitor, former government economy minister Sergio Massa, who received 44% of the vote, has also called Miley to admit his acceptance of the defeat and congratulate him on his election as the new president.

Former US President Trump also congratulated Mille immediately after his victory, stating that Mille would "make Argentina Great Again

Mile's rise to power is definitely a sharp turn in the political direction of Argentina.

As a liberal economist, Milley is a typical Trump style politician: he participated in politics for a short period of time, relied on outspoken and aggressive methods of action, had high exposure on television and social media platforms, used some "eye-catching" viewpoints to attract fans, used the contradictions between the government and the public, and frantically absorbed the votes of the people who were disappointed with the previous government's economic policies in a short period of time, and ultimately won the election with one go.

Mile believes that the solution to the current high inflation in Argentina (which has surged by 142% in 12 months) and economic difficulties is to close the central bank, dollarize the Argentine economy, cancel the local currency peso, and launch the Southern Common Market, in order to solve the current "torrential" exchange rate problem and the "high fever" inflation problem.

Mile's competitor, Massa, as a former Minister of Economy, is actually one of the leaders of Argentina's economic depression. When he served as Minister of Economy, he advocated that Argentina must subsidize the new energy and transportation industries, but did not propose a detailed plan to activate the Argentine economy during the election campaign.

Moreover, like other countries' politicians with the similar title of "Trump of a certain country", Millet is not interested in the Argentine economy that cooperates with China. He has publicly criticized the former President Fernandes' China policy for many times, and believes that Fernandes' participation in the opening ceremony of the Beijing Winter Olympics and signing the memorandum of understanding on the joint construction of the "the Belt and Road" is "surrender to China". He even threatened to cancel all Sino Arab cooperation after he took office.

After the primary election of the presidential election on October 22nd, Millet gave an interview to Bloomberg News in the United States. When asked how he viewed relations with China, Millet's answer was extremely negative. In his diplomatic priorities, 'alliance with the West' has always been at the top, and 'Argentina's geopolitical allies can only be the United States and Israel'.

In contrast, the former Argentine government has shown a positive performance in handling relations with China. Currently, China is Argentina's second largest trading partner; Last February, China and Arab States signed a memorandum of understanding on the construction of the "the Belt and Road"; In June this year, the two countries not only signed the Cooperation Plan to promote the "the Belt and Road" in Beijing, but also signed a cooperation plan covering 13 areas. In the same month, Argentina used RMB for the first time to repay its foreign debt. In October this year, former President Fernandez of Argentina also paid a special visit to China to attend the third the Belt and Road Forum for International Cooperation.

For China's lithium battery industry, especially lithium raw material companies, the political trend in Argentina is still greatly influenced by the changes in Mile.

In an interview with Xinhua News Agency in early January this year, Wang Guangya, Minister of Natural Resources of China, said that some important mineral resources in China have a high degree of external dependence. Once the international situation changes, it will definitely affect economic security and even national security.

The Chinese government included 24 strategic minerals in the National Mineral Resources Plan released in 2016. In addition to traditional energy resources such as oil, natural gas, shale gas, and coal, metals such as nickel, cobalt, lithium, and rare earths were also included.

Argentina is not only a major exporter of soybeans, corn, beef, shale oil, and natural gas, but also the world's fourth largest producer of lithium mines, second only to Australia (324000 tons), Bolivia (207000 tons), and China (107000 tons).

Lithium, as an important mineral required for energy transformation, has been the focus of China and the West's efforts to ensure supply in recent years. More than half of the world's lithium reserves are located in Argentina, Bolivia, and Chile, making South America an invisible battlefield for China and the United States to expand their respective influence, even if the United States has fallen behind in this competition.

General Laura Richardson, the commander of the US Southern Command, stated in a speech to the House Military Committee in March that the United States needs to be vigilant about China's influence in the "lithium triangle OPEC" region of South America.

At present, Chinese enterprises operating lithium mines or lithium salt lake projects in Argentina include Ganfeng Lithium (Cauchari Olaroz Salt Lake, Mariana Salt Lake, PPG Lithium Salt Lake, etc.), Xizang Everest (Salarde Arizaro Salt Lake and Salarde Diabillilos Salt Lake), Zijin Mining (Tres Quebradas Salt Lake), and Jinyuan Shares (DONCELLA Project, Laguna Caro Project, Payo Salvaci ó n Project). In addition, Tianqi Lithium also signed an industry chain memorandum with Argentina's YPF Energy Company last year to deepen cooperation between the two sides. Guoxuan High Tech has established a joint venture with Argentine state-owned mining company Jujuy Energy í a y Miner í a Sociedad del Estado to build a lithium carbonate factory in Argentina.

If Mile truly upholds a diplomatic attitude of hatred towards China and pro US relations, there will be incalculable risks to Chinese companies' investments in lithium mining and lithium carbonate production in Argentina, as well as upstream and downstream industries in the supply chain.

However, the good news is that the new Argentine parliament has been elected in the first round of voting in October, and the overall pattern is very scattered. No political party group holds a majority of seats, which means that even if Mile takes office, the support of other factions of parliament members is needed to promote legislation.

This situation may hinder more radical economic or administrative reforms, forcing Mille to adopt a relatively moderate ruling attitude