Argentina's YPF units to start lithium exploration next month

BUENOS AIRES Reuters units of Argentina's state oil firm YPF will begin next month's lithium exploration in a first-ever entry into the sector by state-owned miners as the government tries to benefit from the surging demand for the battery metal, according to a statement on Monday.

Lithium prices have gone past $70,000 per tonne this year as major automakers try to get more supplies of the ultralight metal to shift production from fossil fuel-burning engines to electric-powered vehicles.

The YPF Litio and Y-TEC announced on Monday the start of work on a 20,000 hectare area lithium prospecting project in Fiambala in western Catamarca province, a partnership with local mining firm Catamarca Minera y Energetica. The project aims to identify the highest lithium concentrations in Fiambala salt flats.

The statement didn't disclose how much they would invest in the project or the expected duration of the exploration phase.

Argentina's is the fourth biggest producer of the white metal, with around 20 other lithium projects currently under development, according to Roberto Salvarezza, chairman of the boards of both YPF units, stressing that those are run by foreign or private miners.

Salvarezza is quoted as saying in the statement that they have the possibility of a national company having a presence in obtaining the resource for the first time.

Argentina produces around 8% of global lithium, with Chile accounting for about 22%.

Argentina could increase its lithium production, given its status as the world's second largest lithium reserve, according to the U.S. Geological Survey estimates, with 19.3 million tons.

Bolivia holds more than 21 million tons, although it has struggled to get its state-owned production off the ground for years.

More than half of the estimated global reserves are held in sprawling salt flats by the three South American countries.