Argentina’s state oil firm YPF will start lithium exploration in the country next month through its subsidiaries, reported Reuters.

The move would mark the foray by state-run miners into the sector as Argentina seeks to benefit from surging demand for lithium, which is a key metal for rechargeable batteries.

YPF lithium units, YPF Litio and Y-tec , plan to start exploration work on a 20,000ha area lithium prospecting project in Fiambala in the western Catamarca province.

An alliance between YPF and local mining firm Catamarca Minera y Energetica, the project targets the identification of the highest lithium concentrations in Fiambala salt flats.

Details on investment in the project or the expected period of the exploration phase remain undisclosed.

YPF units’ board chairman Roberto Salvarezza was cited by the news agency as saying that Argentina is the fourth largest coveted white metal producer in the world. Around 20 other lithium projects that are operated by foreign or private miners are currently under development in the country.

Salvarezza said: “Now for the first time we have the possibility of a national company having a presence in obtaining the resource.”

According to US Geological Survey estimates, Argentina holds 19.3 million tonnes of lithium reserve.

Earlier this year, Reuters reported that South Korean steelmaker Posco will spend $4bn on a new lithium mining project in Argentina.

The firm will invest in a project at a salt flat at the border between the northern Salta and Catamarca provinces.