Within the South American nations of Chile, Argentina and Bolivia, the Lithium Triangle comprises an estimated 58 % of the world’s recognized lithium deposits. In 2021, Chile was the second-largest world producer of lithium at 26,000 metric tons (MT). Argentina took fourth place, with 6,200 MT — collectively, the 2 nations accounted for roughly 32 % of all lithium manufacturing that yr.
Nonetheless, the vast majority of lithium reserves in that area presently stay untapped. Argentina, as an illustration, has 19.3 million MT in recognized reserves to Bolivia’s 21 million and Chile’s 9.6 million. All three nations have introduced plans to collaborate in looking for a much bigger function in world lithium provide chains by measures similar to commerce agreements and tax incentives.
Within the face of mounting demand for the battery metallic, the Lithium Triangle is quick changing into a hotbed of lithium funding, with Australian corporations staking particularly massive claims within the area.
The geography of the Lithium Triangle
Located in a area of the Andes in South America’s southwest, the Lithium Triangle takes the type of a sequence of huge salt flats with a collective space of roughly 154,000 sq. miles — roughly the dimensions of all the state of California. Lithium on this scorching and arid area is discovered within the type of mineral-rich brine deposits deep beneath the earth’s floor. Notably with the emergence of strategies like direct lithium extraction, these deposits characterize arguably probably the most promising supply of lithium in all the world.
With that mentioned, the area shouldn’t be with out its challenges, geographic and in any other case. The local weather and excessive elevation of the Triangle’s salt flats present very best situations for permafrost formation, which will be extraordinarily damaging to mining infrastructure. Moreover, lithium initiatives within the area that lack the correct ESG issues have the potential to not solely injury the atmosphere but in addition hurt surrounding communities.
It isn’t sufficient to easily stake claims and develop initiatives within the Lithium Triangle. They need to achieve this strategically, with a thoughts for sustainability and company social duty. Happily, most of the most outstanding mining corporations within the area have already taken this to coronary heart — with a bit of luck, others will quickly comply with go well with.
Important mining initiatives within the Lithium Triangle
Albemarle Company (NYSE:ALB) presently maintains the world’s largest lithium challenge, backed by a novel contract and supported by an extended historical past within the area. Located 34 miles south of the Chilean city of San Pedro de Atacama and surrounded by mountains, Salar de Atacama can also be recognized for being one of many purest sources of lithium on the planet. The annual manufacturing charge of Albemarle’s challenge has elevated from 22,000 to 84,000 MT since 2016.
SQM (NYSE:SQM) is the second largest lithium producer within the area and Albemarle’s chief rival. It additionally maintains a challenge within the Salar de Atacama, and just lately signed a joint sustainability settlement with Albemarle subsidiary Rockwood Lithium. SQM carries the excellence of being the second-largest lithium mining firm on the planet, coming in simply behind Albemarle.
Chinese language lithium big Jiangxi Ganfeng Lithium (OTC Pink:GNENF,SZSE:002460) additionally has a number of initiatives within the Lithium Triangle amongst its holdings. The biggest of those is the Mariana lithium-potassium brine challenge, which makes use of photo voltaic evaporation as a part of its extraction course of. The challenge is located within the western a part of Argentina’s Salta province.
Allkem (ASX:AKE,OTC Pink:OROCF), the results of a merger between Orocobre and Galaxy Sources, owns and operates a portfolio of potash, lithium and boron initiatives in Northern Argentina. It has partnered with Toyota Tsusho (TSE:8015) and the Jujuy authorities to develop a significant greenfield lithium challenge on the Salar de Olaroz. Mentioned challenge could have a deliberate annual manufacturing of 42,500 MT of lithium carbonate.
Livent (NYSE:LTHM) has been energetic in Argentina’s Salar del Hombre Muerto area for roughly 20 years. Its lithium extraction facility has a present capability of 20,000 MT per yr, which it makes use of each as feedstock for its downstream lithium hydroxide manufacturing and within the manufacturing of certified battery-grade lithium. The corporate just lately introduced plans to extend its manufacturing capability within the area by 30,000 MT per yr by 2025.
Lithium Americas (TSX:LAC) collectively owns the Cauchari challenge alongside Ganfeng. Cauchari is notable for being the world’s largest outlined lithium brine useful resource, with an annual manufacturing goal of 40,000 MT.
Lake Sources (ASX:LKE) is one other main participant within the Lithium Triangle, proudly owning 5 initiatives encompassing roughly 2,200 sq. kilometers straight within the coronary heart of the Lithium Triangle.
Along with its personal Cauchari challenge bordering Lithium Americas’, Lake Sources additionally maintains lithium brine holdings in Olaroz and Paso, together with a pegmatite challenge in Argentina’s Catamarca province. The corporate’s most promising challenge, nevertheless, is its flagship, the Kachi challenge, additionally located in Catamarca. Operated alongside Lake Sources’ expertise associate Lilac Options, Kachi is anticipated to provide roughly 50,000 MT of battery-grade lithium carbonate per yr.
What makes Kachi distinctive is Lilac’s patented ion change course of, which is each extremely sustainable and likewise boasts a lithium restoration charge of roughly 80 % — double that of conventional lithium manufacturing strategies. The ion change extraction course of additionally makes use of considerably much less freshwater than the normal evaporation pond methodology. As soon as the lithium has been extracted, the brines are reinjected again into the aquifer versus being evaporated into the environment. The latter methodology damages the water desk and has induced points with some native communities.
Lake Sources and the Invoice-Gates-backed Lilac Options are actually working collectively to carry the challenge as much as full manufacturing. Lake is aiming to provide 50,000 MT per yr from Kachi alone and has an aspirational company goal to ship over 100,000 MT per yr by 2030 utilizing the ion change extraction course of.
Kachi’s demonstration plant, which is presently underway, has already produced greater than 15 % of its whole forecast output because it was introduced on-line earlier this quarter and can see Lilac earn an fairness stake within the challenge.
Takeaway
With world demand for lithium persevering with to rise, it’s extremely seemingly that the Lithium Triangle will quickly be the location of a brand new type of gold rush. We will already see the beginnings of this, as a number of world mining corporations stake their claims within the area. Savvy traders would do nicely to concentrate to the area within the coming years, because it exhibits a substantial amount of promise.
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