Argentinian MLA proposes rise in royalties that may affect lithium projects

Remains of the Incahuasi mine on the Hombre Muerto salt flat. (Image by Jorgiponn, Wikimedia Commons).

An MLA in Argentina’s Catamarca province presented a proposal before the legislature asking for mining royalties to be raised to 51% from the current 2%.

Hugo Ávila, who belongs to the Citizen Union’s Front led by former left-wing president Cristina Fernández de Kirchner, criticized the 2% in royalties that the province receives in particular for the exploitation of the Hombre Muerto salt flat.

Ávila said the Mining Investment Law should be modified because it doesn’t allow regional administrations to charge royalties higher than 3%. He said he would like his province to follow the example of Jujuy and Santa Cruz, whose governments are charging mining royalties of up to 12%.   

A change in royalties may affect lithium projects operating on the Hombre Muerto salt flat

“Through this project, I propose that the province should receive 51% in mining royalties and pursue agreements with the mining companies that exploit our resources,” local media quoted him as saying.

A change in royalties charged to mining companies in Catamarca could affect, for example, Galaxy Resources’ (ASX: GXY) Sal de Vida lithium brine project, Livent’s (NYSE: LTHM) Fenix project and NRG Metals (TSX-V: NGZ) Hombre Muerto North project, as they all sit on the Hombre Muerto salt pan. 

Hombre Muerto is part of the so-called “Lithium Triangle,” composed by Bolivia’s Salar de Uyuni and Chile’s Salar de Atacama. Together, these salt flats contain most of the world’s lithium reserves, with somewhere between 50%–70% of the global lithium supply originating from the Salar de Atacama and the Salar del Hombre Muerto.