Spotlight: Argentina's lithium potential

Argentina has attracted key lithium players and is betting on development of operations to produce the soft white metal with US$4.2bn in investment that could potentially double output by 2025.

Authorities are also developing a framework to increase legal certainty for potential project developers.

Investors are eyeing the country’s lithium potential to take advantage of the global energy transition and supply constraints caused by environmental hurdles that hold back project development, Brandon Rakszawski, an executive at VanEck Green Metals, said in a corporate Q&A.

David Guerrero, former head of lithium company Galaxy Resources Argentina, said in a lithium podcast that Argentina’s market attracts a lot of international players, but developing its potential will take about three more years.

“There are hundreds of projects that will require additional efforts, not just from the operational side of things, but also from a capex side to invest in infrastructure that's not yet there. I initially mentioned that Mariana and some of the projects in Catamarca [province] will face the same challenges,” he added.

KEY PROJECTS

In late May, China’s Ganfeng Lithium started construction at its US$600mn Mariana lithium project in the Llullaillaco salt flat, Salta province. The project includes a plant in Güemes industrial park and is expected to produce 20,000t/y of lithium carbonate equivalent (LCE). The plant will be supplied by a 120MW photovoltaic solar park.

In a 2021 company report, Ganfeng said Mariana hosts 8.12Mt of LCE. 

“We're aware of the window of opportunity that lithium has and we want to fully capitalize on it,” governor Gustavo Sáenz said at the ceremony to begin construction, according to a release.

However, Eramet’s Centenario-Ratones project, Posco’s Sal de Oro development and Lithium Americas' Caucharí-Olaroz initiative will drive overall output through 2025, Guerrero said.

French stainless-steel producer Eramet’s US$600mn Centenario-Ratones deposit hosts around 10Mt LCE and is estimated to have 5 billion cubic meters of brine with average lithium content of 436mg/l. Total reserves are estimated at 1.1Mt, guaranteeing production of 24,000t/y LCE for 50 years.

Eramet is building the lithium plant in cooperation with Chinese steel group Tsingshan, which owns 49.9% of the asset. 

South Korean steelmaker Posco's US$830mn Sal de Oro lithium hydroxide project in the Hombre Muerto salt flat is 4,000 meters above sea level (masl) on the border between Salta and Catamarca provinces. Production is expected to increase gradually to 50,000t/y from end-2024, when construction will finish, before rising to 100,000t/y by 2028.

The project is financed and operated by Posco Argentina. It will become Argentina’s first lithium hydroxide producer for batteries. Total lithium reserves are estimated at 13.5Mt, six times more than estimated in 2018, according to a Posco release.

Lithium Americas revised the capex for its Caucharí-Olaroz lithium brine project in Jujuy province to US$741mn. The 51:49 project in partnership with Ganfeng Lithium is 3,950masl and holds 24.6Mt of LCE. It is among Argentina’s largest salt flat lithium projects, expected to produce 40,000t/y of lithium carbonate in phase I with the addition of 20,000t/y in phase II.

Phase 2 is expected to start in the second half of 2022 and the life of mine is put at 40 years.

Anglo-Australian miner Rio Tinto's US$825m Rincón and China’s Zijin Mining’s US$380mn Tres Quebradas projects will also take three more years, Guerrero said.

Earlier this year, Rio Tinto presented a US$100mn Argentina investment plan for exploration and improvements to the Rincón pilot plant. Rincón will produce battery-grade lithium carbonate from raw brine. 

Tres Quebradas, expected to produce 20,000t/y of LCE, comprises a 35,000ha mineral deposit near Fiambalá town. 

Galaxy Resources's Sal de Vida brine project, also in the Hombre Muerto salt flat, hosts an estimated 6.2Mt LCE, with brine reserves estimated at 1.3Mt LCE. Production is expected to reach 32,000t/y of battery-grade lithium carbonate during a 44-year mine life.

CHALLENGES

Permits could be delayed due to a massive backlog and inadequate processing capacity, Guerrero said.

Infrastructure represents another problem, especially for Mariana, so production “will really be ready for 2025,” according to Guerrero.

The energy required should come mostly from renewable sources, Guerrero said, pointing out that this will also require speedy permit processing.