Argentina's Lithium Boom: How the Nation is Set to Dominate Global Supply by 2030
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The recent developments in Argentina's lithium sector are significant for the global electric vehicle (EV) industry, which relies heavily on lithium for battery production. The country's projected growth in lithium production and export capacity, particularly with the advent of innovative extraction methods like Direct Lithium Extraction (DLE), could substantially alter the global supply dynamics. As companies like Lithium South Development Corporation report substantial increases in lithium resources, this could potentially lead to a decrease in lithium prices due to increased supply. However, the long-term impact on prices will also depend on the pace of EV adoption and the development of alternative battery technologies. Investors should monitor Argentina's regulatory environment and infrastructure capabilities, as these will play crucial roles in actualizing the projected production increases.
The announcement by Lithium South Development Corporation of a 175% increase in lithium resources at its Hombre Muerto North project is a significant material change that may have positive implications for the company's valuation and future revenue streams. The renewal of the Preliminary Economic Assessment (PEA) is a critical step in re-evaluating the project's economic viability and potential return on investment. Given the strategic importance of lithium and Argentina's positioning, this could attract further investment and partnerships. Stakeholders should, however, remain aware of the risks associated with commodity-based investments, including price volatility and potential oversupply, as well as geopolitical risks that could affect Argentina's mining sector.
Argentina's emerging status as a lithium powerhouse has broader economic implications. The country's mining exports, projected to reach $4.5 billion, will contribute significantly to its trade balance and GDP growth. The influx of foreign direct investment in the mining sector can lead to job creation and technological advancements within the country. On a global scale, increased lithium production in Argentina could reduce market concentration and reliance on current major producers, potentially leading to more stable prices and supply chains. However, this depends on the country's ability to maintain a favorable business climate and manage environmental and social challenges associated with mining activities.
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At its flagship Hombre Muerto North Lithium (HMN Li) project in Salta Province,
Lithium South will be utilizing the expertise of Peter Ehren as the primary engineer for Process Optimization and as a Qualified Person for the PEA and NI 43-101 Technical Report. Ehren's track record includes being responsible for the design of other flagship projects such as Salar de Olaroz of Sales de Jujuy of Allkem Limited, the Pastos Grandes of Lithium Americas Corp. (
The report will use the new HMN Li Project upgraded resource of 1.58 million tonnes Lithium Carbonate Equivalent (LCE). It will also take into consideration current market conditions and pricing for LCE. The report will use an Initial Design Capacity (IDC) of 15,000 tonnes per year LCE production. This IDC could be expanded as further project resources and pumping areas are identified.
Ahead of the new PEA's release, Lithium South is now building up their momentum towards production testing on the HMN Li project. Most recently reporting the initiation of a drilling campaign to install three pumping/production wells at the 5-claim block, the first well is currently being drilled to a depth of 200m. Early results from core drilling are promising, with a lithium concentration exceeding 1,175 milligrams per liter.
"We are very excited to be able to increase our total LCE resource by such a wide value," said Adrian F. C. Hobkirk, Lithium South President and CEO. "With the increase in overall resource, we look forward to developing a larger mining plan."
Now with the pumping/production wells underway, each well will be fitted with screen filters and blind casing. Upon completion, long-term pumping tests will be conducted to determine brine transmissivity, including the maximum flow of each well. Lithium South has also partnered with multiple strategic experts in Direct Lithium Extraction (DLE) technology to improve the project's profitability.
The HMN Li Project is surrounded by a
The Hombre Muerto Salar has a history of lithium production with Livent's asset in the salar having been in operation for +25 years just south of the HMN Li Project. The HMN Li Project is also surrounded by a
Now Allkem is in the process of joining up with Livent Corporation (NYSE:LTHM) through a
"As a combined company, we will have the enhanced scale, product range, geographic coverage, and execution capabilities to meet our customers' rapidly growing demand for lithium chemicals," said Livent's President and CEO, Paul Graves (who has also been designated to be the CEO of the New TopCo). "Together we can accelerate our growth plans and deliver more lithium, more reliably, and more quickly, than either of us can do alone."
Upon completion of the merger, the combined company will likely become the largest lithium entity in
While two companies are combining to make a mega corporation, Lithium Americas Corp. (
"Following the Separation, the Lithium Americas (NewCo) team is committed to advancing the Thacker Pass project toward production to support the critical North American lithium supply chain," said Jonathan Evans, Lithium Americas' President and CEO. "Meanwhile, the Lithium Argentina team will advance Caucharí-Olaroz toward full commercial production and pursue development opportunities in its significant growth pipeline in
In June 2023, Lithium Americas (
Another Salta Province project that's making progress is the Tolillar lithium brine project of Alpha Lithium Corporation (OTC:APHLF). Recently Alpha filed the results of a Preliminary Economic Assessment (PEA), following upon an announcement in July which saw a
"Our Strategic Review Process continues, and Alpha is well-positioned with our unique and highly attractive assets," said Brad Nichol, President & CEO of Alpha. "Even with conservative estimates, Alpha's Tolillar project continues to be a significant lithium carbonate project with exceptional and increasing potential."
According to the new PEA, the Tolillar project has a
All of these efforts from Alpha are set to be handsomely rewarded. Earlier in June 2023, the company received an acquisition offer from TecPatrol earlier this year, which began at
Source: https://usanewsgroup.com/2023/04/11/quite-possibly-the-best-lithium-resource-in-argentina-perhaps-the-world/ https://usanewsgroup.com/2023/10/18/the-lithium-race-to-power/
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