Lithium fever doubled production, but natural gas production fell

A recent INDEC report revealed a mixed dynamic in the Argentine mining sector. Lithium production doubled in May, with a 100% year-over-year increase, while natural gas extraction fell 1.6% . Crude oil production, meanwhile, increased 9.4%, driven by the boom in unconventional oil.

Lithium carbonate production reached a record high. In the first five months of the year, production grew 84.1% compared to the same period in 2024. This jump is linked to increased international demand for electric car batteries.

Other sectors also stood out, such as the extraction of minerals for chemical products , which rose 52.2% , and the extraction of limestone and gypsum , which grew 19.3% . Overall, the Mining Industrial Production Index (IPI Minero) rose 0.5% year-on-year in May, although the monthly estimate showed a 1% decline.

Natural gas production fell 1.6% year-on-year, with a 0.4% drop in the conventional segment and a 2.3% drop in the unconventional segment. A total of 1,631,000 m³ of conventional gas and 2,948,300 m³ of unconventional gas were extracted.

Despite the temporary decline in May, the year-to-date figure saw a slight increase of 2.6% compared to the same period last year. However, the May figure raised a red flag for the energy sector.

In contrast, crude oil production increased 9.4% year-over-year. This growth was driven by unconventional oil , which grew 21.7% , while conventional oil production fell 5.2% . In the January-May period, the increase was 9.6% .

Other sectors also showed positive figures: sand extraction rose by 20.8% , ornamental rock extraction by 14.4% , and non-metallic mineral extraction by 7.2% year-on-year.

However, declines were also observed in specific sectors. Coal and peat extraction fell 48.6% year-on-year. Salt extraction fell 6.1% , and clay and kaolin saw a cumulative decline of 5.3% .

The report highlighted the contrasts between a mining industry that is making progress in strategic areas like lithium , but facing setbacks in key sectors like natural gas . In this context, Javier Milei 's government is seeking to consolidate the mining industry's momentum to attract investment and generate foreign currency, but will need to address imbalances in energy production.