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Global Battery Industry Confronts Substantial Investment Requirements to Fulfill Lithium Demand

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A worrying trend that could threaten the world’s shift to renewable energy is looming, according to 2023 analysis from Benchmark. In the report, Benchmark called for an increase of at least $514 billion across the global battery industry supply chain to meet expected demand in 2030, and $920 billion by 2035.

Among the most compelling sources set to help meet the lithium gap is set come from what’s known as the Lithium Triangle, which covers portions of Argentina, Bolivia, and Chile. The prominence of South America’s lithium has created an increasing amount of competition between the West and China. Hence the flooding of investment and development coming from several promising projects in the region, including from Lithium South Development Corporation, Allkem Limited , Livent Corporation, POSCO Holdings Inc. , and Rio Tinto Group.

In Salta Province, Argentina, Lithium South Development Corporation is the 100% owner of the Hombre Muerto North Lithium project (HMN Li Project), strategically positioned within the renowned Lithium Triangle. Recent developments indicate the project is now becoming a lithium mine development. The land package is strategically located adjacent to a massive $4-billion lithium venture by the Korean conglomerate POSCO Holdings Inc. and in close proximity to the Sal de Vida Project currently in development by the soon-to-be merged Allkem Limited and Livent Corporation.

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Ramping up the HMN Li story further, Lithium South recently submitted a new technical report under NI 43-101 standards, revealing a remarkable 175% increase in lithium resources, totaling more than 1.58 million tonnes of lithium carbonate equivalent (LCE) according to its latest Updated Mineral Resource Estimate – Hombre Muerto North Project, NI 43-101 Technical Report Catamarca and Salta, Argentina, Mark King, PhD, PGeo, Peter Ehren, M.Sc, MAusIMM, with an effective date of September 5th, 2023.

Furthermore, the report outlines their innovative approach to extract more lithium from the briny water at the HMN Li Project. Lithium South employs a proven industry method involving the evaporation of pumped lithium brine. They have implemented specific modifications to ensure minimal lithium loss during the collection of the resulting solid materials. Evaporation extraction takes advantage of the amazing free solar resource at the altitude of the project, which is about 15,000 feet. This minimizes the carbon footprint of the project.

“We are very pleased with the substantial upgrade in our LCE Resource at the HMN Li Project and are excited to potentially achieve much higher lithium recoveries,” said Adrian F. C. Hobkirk, President and CEO of Lithium South. “We await the completion of our updated Preliminary Economic Assessment (PEA) which will further evaluate our newly defined, high quality lithium brine resource.”

Up to this point, it appears that Lithium South has improved its ability to extract approximately 70% of the lithium from the briny water, a notable increase from the previous 50%. This signifies a more efficient extraction process, bringing increased viability the project.

Taking into account the current market conditions and pricing for lithium carbonate equivalent (LCE), Lithium South has projected an Initial Design Capacity (IDC) for the project, aiming for an annual production of 15,000 tonnes of LCE. The company is already making progress with the project’s well testing, having successfully installed the third production well, drilled to a depth of 60 meters. A pump test is scheduled to commence immediately upon finalizing the well’s development. A second 400 meter production well is now being installed.

In the lead-up to one of the lithium sector’s biggest mergers, Allkem Limited  and Livent Corporation have already received the required regulatory approval to seal the deal. The prospect of the merger has already caused Allkem’s value to skyrocket within the last few months. Together the new entity—to be called Arcadium Lithium— is set to be worth more than $10 billion.

Ahead of the merger, Allkem secured financing from the International Finance Corporation (IFC) to provide up to A$180 million for the development of its Sal de Vida project in Argentina.

“We are proud to partner with IFC to ensure long-term safe and sustainable operations, responsible products, and thriving communities,” said Allkem MD and CEO Martin Perez de Solay. “We are committed to the highest sustainability standards for Sal de Vida so that it will contribute to the economy of Catamarca via local employment, the development of local supply chains, and community development programmes.”

The development comes less than 6 months after Allkem achieved its first production at its Olaroz Stage 2 lithium plant.

“We are very proud to have achieved the milestone of first production at Olaroz Stage 2 proving the operational viability of the carbonation process,” said Perez de Solay. “The successful expansion of Olaroz reflects our growth strategy and commitment to ensure long-term social and economic sustainability of our business for customers and stakeholders. This achievement demonstrates the expertise of our team who will now focus on completion of commissioning and ramp up to full capacity.”

Having completed its lithium hydroxide plant in its home country of South Korea, POSCO Holdings Inc.  will be looking to build a second plant with the same capacity in 2024. Set to stock these plants will be the lithium reserves POSCO acquired for US$280 million back in 2018, where the Korean giant has also committed at least $4 billion, and more recently pledged US$1.7 billion in the provinces of Salta and Catamarca.

“We talked with POSCO about the next stages in its investment in lithium and the opportunities to develop new value-added chains that include Argentina,” said Argentine Foreign Minister Santiago Cafiero. “The lithium industry has enormous potential for Argentina and, especially, for the provinces that produce the mineral (Catamarca, Jujuy, and Salta), especially if we consider that Argentina is the country with the largest amount of resources with potential economic value within the so-called ‘Lithium Triangle’, which also includes the salt flats in Chile and Bolivia.”

For mining giant Rio Tinto Group, building its own lithium mines is seen as better than buying up existing lithium companies.

“We would rather use our competencies to develop the projects ourselves,” said Rio Tinto CEO, Jakob Stausholm in an interview with Bloomberg Television. “Lithium companies right now are very expensive. We can believe we can find much cheaper ways to get it done.”

Rio Tinto already made a splash in Argentina, back when it completed the acquisition of the Rincon Lithium Project in 2022 for $825 million. By mid-2023, the company had already begun reviewing the $140-million cost estimate and schedule for a starter plant on the project.

“Rincon strengthens our battery materials business and positions Rio Tinto to meet the double-digit growth in demand for lithium over the next decade, at a time when supply is constrained,” said Stausholm at the time of the acquisition.

Rio Tinto recognizes the substantial promise of the Rincon project, envisioning it as a sustainable, expandable source capable of generating top-quality lithium carbonate over an extended period. The innovative direct lithium extraction technology under consideration for this project has the potential to substantially enhance lithium recovery rates when compared to traditional solar evaporation ponds.

 

Source: PR Newswire

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