U.S. offers Argentina's Milei support on IMF, lithium - White House adviser

By Adam Jourdan

BUENOS AIRES (Reuters) - A U.S. delegation gave its support to Argentine President-elect Javier Milei over talks with the International Monetary Fund (IMF) and developing its lithium sector during a meeting in Buenos Aires on Saturday, a White House official told Reuters.

Juan Gonzalez, adviser to U.S. President Joe Biden and the National Security Council's Western Hemisphere senior director, said the talks, a day ahead of Milei's inauguration, were "very positive" and focused on the country's embattled economy.

Argentina is struggling with inflation nearing 150%, while over two-fifths of the population is in poverty. Its $44 billion IMF program has skidded off track, central bank net reserves are deep in the red and a recession is looming.

Milei is set to roll out a series of measures to rein in state spending after his inauguration, a "shock" therapy plan which his backers hope will stabilize the economy, but which is likely to be painful for Argentines at least in the short-term.

"I think priority number one is the economic challenges that Argentina is facing," Gonzalez told Reuters in an interview in Buenos Aires hours after meeting with Milei, adding the country needed space and time to get its house in order.

"Argentina needs to fix those challenges," he said, adding that the grains producing country also needed to come to an agreement on its economic plan with IMF staff.

"We've just been trying to encourage dialogue ... and encourage a constructive outcome between Argentina and the IMF."

The current IMF program, which replaced a failed 2018 deal, has increasingly wobbled as Argentina's economic crisis has worsened, a trend that drove the rise of right-wing outsider Milei, a libertarian economist and former TV pundit.

Gonzalez said that the delegation had discussed lithium with Milei, including the country's hope to benefit from the U.S. Inflation Reduction Act (IRA), which it currently does not as it is not a Free Trade Agreement (FTA) partner.

He also said the United States was willing to support Argentina, the world's no. 4 producer lithium, expand beyond production of the key electric battery metal.

"Certainly Argentina is a source of lithium, but there is no reason that Argentina should not be refining and moving up on the value chain of lithium, and we want to help," he said.

Asked about a potential deal to facilitate Argentina buying used U.S. F-16 jets, he said the two sides were "having discussions", without giving further details.

Milei, who has pledged a pro-U.S. foreign policy and been critical of China, is set to be sworn in Sunday with dignitaries expected including Ukraine's President Volodymyr Zelenskiy and Hungarian Prime Minister Viktor Orban. Right wing former Brazilian leader Jair Bolsonaro, who met with Milei on Friday, will also be there.

Gonzalez said there was no meeting confirmed with Zelenskiy, who wants to bolster support for Ukraine's 21-month-old war against Russia, but that an informal discussion was likely with the U.S. delegation head, Energy Secretary Jennifer Granholm.

"I think on the floor of the inauguration, there'll be an opportunity to talk. I'm sure she'll seek him out," he said.

(Reporting by Adam Jourdan; Editing by Daniel Wallis)