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The Economic Implications of South America’s Growing Lithium Industry

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Known as the element that powers our smartphones, laptops, and, increasingly, our cars, lithium is in incredibly high demand.

While the market transitions to a low-carbon future, lithium-ion batteries are becoming more and more essential, with electric vehicles being one of the biggest drivers of demand. Luckily, South America looks to have us covered. In fact, South America holds around 75% of the world’s known reserves, with Argentina, Chile and Bolivia representing the so-called ‘lithium triangle’ of producers.

According to the United States Geological Survey (USGS), as of 2021, Chile has the largest lithium reserves in the world, followed by Argentina and Bolivia.

The importance of South America in this is race is gaining momentum, so much so that governments around the world are moving to secure their supplies from the Lithium Triangle and other parts of South America for the future, knowing that China is seemingly way ahead of the rest of the pack, including these recent developments:

· Germany’s Chancellor Olaf Scholz visited South America, calling for a ‘New Approach to the Lithium Rush

· Bolivia tapped Chinese battery giant CATL to help develop its lithium

· Argentina, Chile and Bolivia are in talks to unite in battery metal industry

· South Korea’s POSCO invested $4 billion into the Lithium Triangle

Chile has an estimated 8.6 million metric tons of lithium reserves, mostly located in the Salar de Atacama. The Salar de Atacama is home to some of the world’s largest lithium brine operations.

Argentina is one of the world’s major players in the lithium industry, and for good reason. It has an estimated 6.4 million metric tons of lithium reserves, primarily located in the Salinas Grandes and Hombre Muerto salt flats in the northwest of the country. The lithium brines found in the country are some of the highest grade in the world, with concentrations of lithium reaching up to 3,200 parts per million (ppm). In comparison, the average concentration of lithium in seawater is around 0.1 ppm.

 

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This high concentration of lithium in Argentina’s brines makes them particularly attractive to mining companies, as it means that the extraction process can be more efficient and cost-effective. It also means that the environmental impact of mining can be minimized, as less water is needed to extract the same amount of lithium as in other regions.

The Salar de Olaroz, located in the northwestern province of Jujuy, is one of the largest and highest-grade lithium brine deposits in the world. It is estimated to contain around 6.4 million tonnes of lithium carbonate equivalent, which is around 9% of the world’s total known lithium resources.

Other major lithium deposits in Argentina include the Salar del Hombre Muerto and the Salar de Cauchari. Both of these deposits are also known for their high-grade lithium brines, and are being developed by major mining companies.

Bolivia has an estimated 5.4 million metric tons of lithium reserves, located primarily in the Salar de Uyuni. However, lithium mining in Bolivia has been slower to develop than in Chile and Argentina, and the country faces significant political and social challenges.

Brazil, which is not part of the Lithium Triangle, also has significant lithium resources. As of 2021, Brazil was the world’s seventh-largest producer of lithium, with an estimated 86,000 metric tons of reserves. The main lithium deposits in Brazil are located in the states of Minas Gerais and Ceará, with significant exploration activity taking place in other regions of the country as well. The Brazilian government has made lithium a priority mineral for development, with plans to develop a domestic lithium-ion battery industry, and a new mine is on schedule to produce in April 2023.

Overall, the Lithium Triangle and Brazil are important players in the global lithium market. With the growing demand for EVs and other clean energy technologies, the world will increasingly rely on these regions for their lithium resources.

The economic implications of South America’s growing lithium industry are far-reaching. One of the most immediate impacts is the creation of new jobs in the region. According to the World Bank, the lithium industry in South America is expected to create thousands of new jobs, particularly in Bolivia and Argentina, where the industry is still in its infancy. These jobs span a variety of skill levels, from mining and exploration to engineering and research and development, and have the potential to provide a significant boost to local economies.

The potential economic benefits of South America’s growing lithium industry are significant. The lithium industry is expected to continue to grow in the coming years, driven by the increasing demand for lithium-ion batteries used in EVs and other technologies. As this industry grows, it has the potential to create new jobs, drive economic growth, and provide much-needed revenue for local governments.

Furthermore, the growing lithium industry has the potential to play a crucial role in the global transition to clean energy. The widespread adoption of EVs and renewable energy technologies will require a significant increase in the production of lithium-ion batteries, and the lithium reserves in South America are a key resource in meeting this demand.

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A timeline of events in the bread price-fixing scandal

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Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.

Here’s a timeline of key events in the bread price-fixing case.

Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.

Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.

Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.

Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).

Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.

June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.

Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”

Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.

July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.

Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)

The Canadian Press. All rights reserved.

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S&P/TSX composite up more than 250 points, U.S. stock markets also higher

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TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.

The S&P/TSX composite index was up 254.62 points at 23,847.22.

In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.

The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.

The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.

The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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Construction wraps on indoor supervised site for people who inhale drugs in Vancouver

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VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.

Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.

The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.

“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.

“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”

Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.

The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.

The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.

Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.

More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.

Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.

“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.

Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.

“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.

Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.

Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.

Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”

“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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