April 2022
Countries in the Americas are looking to bring new lithium projects online to capitalise on soaring demand growth for lithium-ion batteries as global decarbonisation efforts ramp up. In the Americas, AME estimates that 315,386t of lithium carbonate equivalent (LCE) production capacity will come online from new sites between 2022 and 2024.

In 2022, around 76ktpa of LCE production capacity is aiming to start up from new sites in Argentina and Brazil. By 2023, an additional 114,455t of LCE capacity will come online in Argentina, Mexico, and Canada. In 2024, another 124,931t LCE of capacity will come to fruition in Argentina, Chile, and Canada.

Despite the optimism of new sites coming online, these projects will take years to ramp up to full production capacity, and global supply disruptions are resulting in delays and overall constraints, in everything from equipment to labour.

There is significant production capacity upside given the large array of projects in early development stages as everyone from start-ups to major miners and automakers look to get into the lithium game. It is important to note, however, that developing industrial-scale mines still takes 10-15 years on average. 

Given that North America is looking to rapidly develop an electric vehicle supply chain, lithium producers in the broader Americas region could stand to benefit as countries and companies alike look to bring their supply chains closer to home, while prioritising geopolitical considerations.

Looking at lithium resources by country, Bolivia hosts about 21Mt, followed by Argentina with 19Mt, Chile with 9.8Mt, the US with 9.1Mt, Canada with 2.9Mt and Mexico with 1.7Mt, according to data from the United States Geological Survey (USGS).


Emerging Trends

In North America, government intervention and resource nationalism has been on the rise. In the US, both the current and previous administrations have pursued policies to decrease the country’s reliance on trade with China.

This month, Mexico President Andres Manuel López Obrador passed a bill to nationalise the country’s lithium deposits as a strategic mineral. Just last month, US President Biden invoked the Defence Production Act to increase domestic production of battery metals, such as lithium and cobalt, to reduce dependence on “unreliable foreign sources”.

Meanwhile, under the new USMCA trade agreement, carmakers in the US, Canada and Mexico must have at least 75% of their components produced in the region to qualify for tariff-free trade. This is up from the 62.5% requirement under the 1994 North American Free Trade Agreement (NAFTA).

While most lithium batteries used for electric vehicles assembled in North America are currently imported from South Korea, automakers are investing billions to build up a domestic battery supply chain. The availability of lithium will be key to realising these investments.

The region’s auto industry supply chain is currently scatted across all three countries. The US imports US$29.4bn of car parts from Mexico and exports US$5.9bn of parts to Canada. The country exports US$11.7bn of completed vehicles to Canada and US$67.5bn to Mexico.

Meanwhile, high lithium prices have attracted major miners to jump into the battery metals game. In the second half of 2021, South African precious metal miner agreed to spend US$490m to acquire a 50% interest in Ioneer’s Rhyolite Ridge lithium project in Nevada, US, followed by a US$72.2m private placement for a 7.12% interest in Ioneer itself.

In January of this year, China’s Zijin Mining acquired Toronto-listed Neo Lithium Corp. and its 3Q lithium project in Argentina, for $765.3m in cash. In the same month, Vancouver-based Lithium Americas acquired Millennial Lithium Corp and its Pastos Grandes project in Argentina for US$390m.



Zijin Mining (3Q)

Construction of the Tres Quebradas (3Q) lithium brine project in Argentina has begun, China's Zijin Mining announced on 29th March. Zijin will construct a US$380m lithium carbonate plant at the project, which covers an area of 35k-ha in Catamarca province.

The plant is expected to produce 20ktpa of lithium carbonate, with an aim to double that in the medium term. Plant construction is slated to begin this year, with first production by 2023-end, according to the Argentine government. The project will mark Zijin’s first foray into lithium, with the company a major gold and copper producer.


Lithium Americas (Cauchari-Olaroz)

Lithium Americas expects to start phase-one production at its 49%-owned Cauchari-Olaroz project in Jujuy province in mid-2022. China’s Ganfeng Lithium owns the remaining 51%.



The conventional brine project is expected to produce 40ktpa of lithium carbonate over 40 years. Annual average EBITDA is estimated at US$308m, using assumed long-term pricing at US$12k/t. Operating costs have been estimated at US$3,579/t.

Total capital costs have been revised 16% higher to US$741m, partly fuelled by inflationary pressures. In March, Lithium Americas said construction works were 85% complete. Offtake agreements are in place for over 80% of stage-one production at market prices. The phase-two expansion, which would boost output by 20ktpa, is expected to start construction after phase-one is commissioned, and then come online in 2025.


Lithium Americas (Pastos Grandes)

Meanwhile, 100km from Caucharí-Olaroz, Lithium Americas has recently acquired the Pastos Grandes project in Salta province. It has a Resource of 4.1Mt of LCE at 427 ppm lithium.

Former owner Millennial Lithium completed a feasibility study in 2019, based on 24ktpa of lithium carbonate production over a 40-year mine life. Millennial invested C$40m (US$31.6m) in exploration and development work for the project. The Environmental Impact Assessment (EIA) for construction and operation permit were both approved in mid-2020. The project is expected to enter production in 2024.


Argosy Minerals (Rincon)

ASX-listed Argosy Minerals expects first production of lithium carbonate from its 2ktpa LCE Rincon project in Argentina’s Salta province in mid-2022. In 2021, capex was estimated at US$20m. An Environmental Impact Assessment (EIA) approval is also in progress to develop an additional 10ktpa LCE operation.

A Preliminary Economic Assessment (PEA) in 2018 outlined a 16.5-year mine life at 10ktpa LCE production (which was lowered to 2ktpa) and an operating cost of US$4,645/t. Annual average life of mine pre-tax free cash flow is estimated at US$74m, using assumed pricing of US$13k/t. It has an internal rate of return (IRR) of 53%, a pre-tax net present value (NPV) of US$399m and a payback period of 2.1 years.


Lake Resources (Kachi)

ASX-listed Lake Resources’ plans to produce 25,500tpa of lithium carbonate using direct extraction technology at its flagship Kachi project in Catamarca province. In January 2022, Lake said that production will be increased from 25,500tpa to 50ktpa LCE in the Definitive Feasibility Study (DFS), set to be released in mid-2022.

A 2018 Pre-Feasibility Study (PFS) at 25,500tpa outlined a US$1.6bn pre-tax NPV and annual EBITDA of US$260m from 2024, using pricing of US$15,500/t lithium carbonate. It has a maiden JORC Resource of 4.4Mt of contained LCE. The project’s capital cost is estimated at US$544m. Construction is expected to take two years.

The project plans to use the direct extraction technique, which promises a higher lithium recovery (70-99%), compared to ~40% with the conventional evaporation process. The method has a much smaller environmental footprint as there is no need for huge evaporation ponds. However, the technology has not been tested at scale or over a significant time period.

Lake has been testing direct extraction in partnership with Lilac Solutions, with a pilot plant module in California showing 80-90% recoveries. Lilac, backed by Bill Gates-led Breakthrough Energy Ventures, currently owns 10% of the Kachi Project, and may earn-in up to a 25% stake.


Allkem (Sal De Vida)

First production at Allkem’s 100%-owned Sal De Vida mine in Argentina has been delayed by nearly a year to the second half of 2023, mainly because of the pandemic. The company is targeting 15ktpa LCE in stage 1, moving to 30ktpa LCE in stage 2. Operating costs are estimated at US$3,612/t.

Sal de Vida has an ore Reserve estimate of 1.1Mt of retrievable LCE and 4.9Mt in Mineral Resources, supporting a mine life of over 40-years. It has a pre-tax NPV of US$1.23bn, based on an expected price of US$17,485/t, a pre-tax IRR of 50% and a payback period of 1.75 years.

Construction began in January 2022 and is expected to take six to nine months, the company said. The stage 1 project will be 30% powered by solar energy. Capital costs were estimated at US$271m.




Lithium Power International (Maricunga)

Lithium Power International’s 51.6%-owned Maricunga project has revised its scope to focus on a smaller scale operation, producing 15,200tpa LCE over 20 years. The previous Definitive Feasibility Study (DFS) in 2019 outlined a 20ktpa operation. 

The new DFS, released in January 2022, outlined an after-tax NPV of US$1.425bn (8% discount), providing an IRR of 39.6% and a two-year payback. Annual average EBITDA is estimated at US$324m. Operating costs are estimated at US$3,718/t, not including a credit from potassium chloride by-products.

Maricunga is currently the most advanced project in Chile outside of the mine expansions by SQM and Albemarle. A final investment decision (FID) is expected this year, with construction to start immediately after.




Sigma Lithium (Grota do Cirilo)

Sigma Lithium is on track to begin production at its Grota do Cirilo lithium project in Minas Gerais in the December quarter of 2022. Phase one is expected to produce 34ktpa of LCE (230ktpa spodumene concentrate of 6% lithium) for a period of eight years.

An updated feasibility study, released in April 2022, outlined a phase one capex of US$123.1m, slightly higher than the previous estimate of US$113.6m in 2019. The study revealed an after-tax NPV for phase 1 of US$1.6bn and an after-tax IRR of 424%.

A proposed second phase has the potential for additional production of 33ktpa LCE (220ktpa spodumene concentrate) before end of 2023.

Total mineral reserves are estimated at 33.6Mt, including 25.3Mt of proven reserves at an average grade of 1.44% Li2O. The project has a spodumene cash cost of US$342/t for phase one and US$360/t for phase two.




Banacora Lithium, Ganfeng Lithium (Sonora)

Mexico doesn’t have any lithium mines in production yet. The closest is the US$420m Sonora project, a joint venture between Bacanora Lithium and Ganfeng Lithium, which is scheduled for first production in the December quarter of 2023.

The project is looking to produce 35ktpa of battery-grade lithium at an average operating cost of US$4,000/t. A feasibility study outlined a US$1.25bn NPV and 26% pre-tax IRR and a payback period of four years. The deposit has 8.8Mt of LCE resources. The conventional sulphate route process will be used. The project includes a 97,389-ha licence area, located 190km north-east of Hermosillo in northern Mexico, consisting of 10 concessions. Lithium offtake deals are in place with partner Ganfeng and Japan’s Hanwa.




Allkem (James Bay)

Allkem’s 100%-owned James Bay hard-rock lithium project is expected to start construction in the second half of 2022. Construction is expected to take six to nine months,

The 2021 Feasibility Study outlined an average annual production of 44,455t LCE (321ktpa of spodumene concentrate at 5.6% lithium). The expected 19-year mine life is supported by a Mineral Resource Estimate of 40.3Mt at 1.4% Li2O and Ore Reserve of 37.2Mt at 1.3% Li2O.

Operating costs have been estimated at US$333/t of concentrate and capital cost estimates of US$286m. The project has a pre-tax NPV of US$1.4bn (8% discount) based on an expected spodumene price of US$1,000/t, a pre-tax IRR of 45.8% and a payback period of 2.4 years. The spodumene pegmatite deposit supports a life-of-mine strip ratio of 3.5:1 and an open cut operation using conventional mining. The site will be 45% powered by hydro power.


Critical Elements Lithium (Rose)

Critical Elements Lithium Corporation’s Rose project, in northern Québec, is aiming to produce 186,327tpa of chemical grade lithium concentrate over a 17-year mine life. Rose is also aiming to produce 50,205tpa of technical grade lithium concentrate (used for glass and ceramics) and 429tpa of tantalum concentrate (used primarily in electronics). The mine will excavate a total of 26.8Mt ore grading an average of 0.85% Li2O and 133 ppm Ta2O5.

An updated Feasibility Study (FS) for the Rose mine and concentrator is expected to be released in the June quarter of 2022. Meanwhile, an engineering study for a chemical plant, which would produce 27ktpa of LCE, is also expected in the June quarter. These engineering studies are expected to support a final investment decision (FID) this year, in order to start production as previously envisioned, in 2024.

Critical Elements’ 100%-owned Rose lithium project in Québec has a land portfolio of over 700km. It would be 93% powered by hydroelectricity. A 2017 FS outlined an after-tax IRR of 34.9% and an NPV of C$726m (US$574m) (8% discount) at an assumed price of US$750/t for chemical grade. Average operating costs were estimated at US$66.56/t milled and US$344/t of concentrate. The capital cost was estimated at C$341.2m (US$270m).


Nemaska Lithium (Whabouchi)

Nemaska Lithium’s vertically integrated Whabouchi operation, in Quebec, comprises a mine, concentrator and lithium hydroxide processing plant. Whabouchi aims to produce 33,231t LCE (215ktpa of spodumene concentrate at 6.25% lithium) over a 33-year mine life. 

Whabouchi will be mined using conventional open pit mining for the first 26 years of operation, followed by seven years of underground mining. All required authorisations have been received. A detailed engineering study for its lithium hydroxide plant, in Bécancour, is expected in the northern summer of this year. Construction is expected to begin in 2023.

Nemaska emerged from creditor protection in August 2020 under the joint ownership of Investissement Québec, Pallinghurst Group and Orion Mine Finance.