Argentina hopes to become a major producer and exporter of lithium and lithium compounds, which are used in batteries for consumer electronics, electric and hybrid vehicles and power storage for alternative energy sources such as wind and solar power.
Lithium Exploration Group said it acquired 60 percent ownership of five mining concessions in the Salta province in northwestern Argentina.
The five concessions cover 104,765 acres on the western edge of two salt lakes, Salar de Rio Grande and Salar de Arizaro.
The company said the mineral assets were under-explored but had potential for significant yields of both lithium and potassium. The minerals are extracted from the lakes' surface water.
All five concessions are on the Puna plateau, a lithium-rich, high-elevation basin on the eastern slopes of the Andes that straddles the Argentina-Chile border. The area is about 45 miles south of the Salar de Atacama and 60 miles northwest of the Salar de Hombre Muerto, both of which are actively producing lithium.
"We are very excited about the opportunity to explore these five cateos," said Lithium Exploration Group Chief Executive Officer Alex Walsh, citing the local term for prospecting concessions.
Walsh said technical reports had indicated the high mineral content of the two salt lakes. The deal offers the company "an amazing opportunity to explore the groundwater in a region that holds some of the largest deposits of lithium in the world," he said.
Lithium Exploration Group is an exploration and development company with headquarters in Scottsdale, Ariz. The company is focused on the acquisition and development of lithium brines and other precious metals that demonstrate high probability for near-term production.
Currently the company is focused on developing its Western Canada and South America properties.
In March, Argentina opened a new lithium carbonate processing plant in Salta, close to the borders with Bolivia and Chile, and declared it hoped to turn it into the world's largest processing facility of its kind. Chile is the world's largest lithium producer.
Lithium and lithium carbonate markets are set to grow in Latin America with the commissioning of Argentina's new plant and moves by other Latin American nations, including Bolivia, to develop deposits.
Argentina's lithium carbonate processing plant is a joint venture between Australia's Admiralty Resources and Argentine interests.
ADY, which helped set up the plant, says it plans to invest $300 million in addition to about $75 million it says it has already spent on developing the facility.
Argentina exports lithium to the United States and Britain, China, Germany, Japan, the Netherlands and Russia.
The Argentine plant has come on stream while Bolivia considers how to move forward with ambitious plans to exploit its vast lithium reserves. Bolivia's plans to enter into a joint venture with Iran raised opposition among the country's internationally connected financial interests.
Last year, Bolivian President Evo Morales announced he would work with Iran to push forward development of the country's lithium reserves. Earlier, Bolivia announced other countries and international companies and consortiums had approached with offers to develop the country's lithium deposits.
Little has been heard since last October of Iran's offer to lend Bolivia about $283 million to finance development projects, some with Iranian assistance.
About 60 mining companies have done feasibility studies in Latin America, Nevada and as far afield as Serbia. New lithium projects were started recently in Canada, China, Finland and Mexico.
Analysts said that recycling of lithium from used batteries was also likely to become a major business.