Lithium Extraction Overview – South America

Lithium, as we know, is one of the most critical minerals in the lithium battery value chain. Its sources are concentrated in specific regions worldwide, including South America, Central Africa, Australia, China, and North America. Lithium reserves exist in two primary forms: brine and hard rock. Brine deposits are more prevalent in South American countries such as Chile, Argentina, and Bolivia, while hard rock sources are more common in Australia, Zimbabwe, Nigeria, and North America.

In recent years, smaller lithium deposits have also been discovered in regions across Europe, the Middle East, and India. Lithium processing is becoming increasingly challenging from both environmental and economic perspectives. High water consumption, the supply chain for chemical reagents, and overall operating costs are key factors that differentiate profitable projects from those with no future.

As a result, major industry players are prioritizing investments in projects with a robust cost structure, ensuring reliability and resilience against fluctuations in lithium chemical prices and demand. While some extraction and refining processes have been well-established and mature for decades, new and emerging technologies are gaining traction, offering potential advantages in terms of both environmental impact and process profitability.

This article is just an extract of a broader analysis comparing lithium technologies and examining the South American market landscape. A deep analysis of a project’s true economic sustainability is essential, considering not only the technological aspects but also the entire infrastructure, logistics, and overall project strategy. In an increasingly competitive market landscape, a holistic approach is crucial to ensuring feasibility and long-term success.

Challenges in Lithium extraction

WATER CONSUMPTION: Usually, lithium resources are located in desertic location, population suffers of lack of water for their own consumption, the scarcity provokes social discontent with lithium mining operations. Most of DLE technologies needs freshwater for elution of Li. Even some technologies use x10 freshwater if we compared with evaporation ponds.

ENERGY: The process of lithium carbonate requires a lot of energy, since it´s a slow process, even with new technologies (DLE) the energy consumption is still high.

Restriction and Policy in South America: Argentina

The Government of Chile has not made restrictions of exporting lithium chloride, lithium carbonate technical grade, lithium carbonate battery grade, and lithium compounds in general to any client/country. The government of Chile is promoting the public-private cooperation, with national entities/companies such as Codelco/Enami, for lithium extraction projects. Direct Lithium extraction technologies are welcome to be implemented in these projects. The new strategy does not interrupt previous operations (SQM, Albemarle).

Here the Chilean strategy in bullet points:

• Thirty-eight (38) salt flats will be protected and will not be exploited.
• In every case the gov. Of Chile is the owner of the lithium resource, giving permission /contracts with national or foreign entities.
• There is another group of twenty six (26) salaries in which a “call to express interest” will be made to national and foreign investors to develop one or more projects to exploit lithium deposits.
• In five (5) other salt flats, Pedernales, Grande, Los Infieles, La Isla and Aguilar, projects may be developed by implementing public-private alliances with the flexibility required by each initiative, in this scenario even national entities can participate.

Bolivia has imposed restrictions on the lithium value chain. They banned the exportations of Lithium Chloride, Lithium Sulfate, and intermediate products of the evaporite chain due to government policy. The country is open to export Lithium carbonate Technical grade, Lithium carbonate battery grade, Lithium Hydroxide, Potassium Chloride, Potassium Sulfate, Potassium Nitrate to any client/country. Government of Bolivia is the owner of the lithium resources and it has made some deals with foreign companies such as CATL, Rosatom group, Vulcan energy, others.

The Gov. of Bolivia through YLB, it has installed a Lithium Carbonate plant with 15.000 Tons /year of capacity using traditional evaporation ponds, this projects was founded entirely by public funds. Currently, Bolivia is working with foreign companies in order to implement Direct Lithium Extraction technology in at least five (5) projects.

This new approach that Bolivia is developing in their lithium projects, it does not imply the creation of Joint-Ventures or the rights of mining concessions as has been reported by some media.

The model of business is the implementation of lithium plants as service for the government of Bolivia and then YLB compromised the production of the plant for the foreign company. Normally, a feasibility study is reviewed and approved by YLB, then it is issued to the Bolivian Congress for final revision and approval.