November 2022
Brine projects from the lithium triangle – Argentina, Bolivia, and Chile – make up about a third of global lithium supply. Supply from South America is expected to increase significantly over the next few years, especially in Argentina which has the world’s biggest pipeline of lithium projects.

Chile, with the largest lithium reserves in the world, is the second largest producer of lithium after Australia. Argentina is third on the list of lithium producing countries, not far behind Chile in production capacity.



Chile sources the majority of its lithium from vast brine sites at the Salar de Atacama, operated by Chilean miner Sociedad Quimica y Minera (SQM) and US-based chemicals giant Albemarle. The Chilean salt plains contain nearly 25% of global lithium reserves. AME expects the Chilean lithium supply to be 165kt LCE in 2022, up 42% from last year.

SQM is reducing its brine extraction by 50% by 2030 following multiple investigations from the authorities over the company’s industrial impact. SQM will modernize its equipment and process for brine extraction at its extensive sites in Northern Chile at a cost of US$1.5bn. This will improve the evaporation process and operating yields at the Salar de Atacama sites.

SQM targets an annual production around 250kt LCE despite the reduction in brine extraction. SQM plans to use a desalination plant to use seawater in its extraction process. Using seawater will reduce the freshwater usually required in the production process. Over the long term, SQM targets to reduce its freshwater net usage to zero.

Albemarle, which has been operating in Chile for over 40 years, launched its third lithium carbonate chemical conversion plant in Antofagasta in June. Located in northern Chile’s Atacama Desert, the La Negra III/IV conversion plant is expected to double lithium production. The conversion plant costs over US$500m for the R&D laboratories and chemical process facilities.

The facility will receive lithium concentrate from Albemarle’s Salar de Atacama site to produce battery grade lithium carbonate. The new facility includes a US$100m thermal evaporator that reduces water consumption during the production process by up to 30%.


Argentina’s Growing List of Projects

Argentina, through tax cuts and new mining infrastructure, is attracting miners to take advantage of its huge lithium reserves. Argentina’s supply is forecast to double to 121kt LCE in 2023. Argentina will overtake Chile in production capacity by 2025, growing at a CAGR of 39% over the medium term to reach 314kt LCE in 2027.

Chinese companies, including Zangge Mining, Gotion High-Tech, and Ganfeng Lithium, continue to invest in Argentinian projects to expand their upstream lithium resources.

Canada's Ultra Argentina and China's Zangge Mining will invest US$290m in Argentina to explore and develop lithium deposits. The two miners will initially invest US$40m in the Laguna Verde project in the country's Catamarca province. This will be followed by a US$250m investment from Zangge to build a production plant by late 2023.

Chinese battery cell manufacturer Gotion High-Tech has signed an agreement to build a lithium carbonate plant in Argentina. Gotion, which is partly owned by Volkswagen, has inked an agreement with Argentina’s state-owned mining company, JEMSE, to jointly build and operate a battery-grade lithium carbonate in Jujuy province.

The initial plan is for the plant to have an annual capacity of 10ktpa of lithium carbonate, with the possibility of expanding by a further 50ktpa, based on market demand. The two companies will establish a joint venture, known as Gotion Jujuy Mining.

Ganfeng Lithium under its Argentinian subsidiary Litio Minera Argentina, has announced it has begun construction on the Mariana lithium project, located in Argentina’s northwestern Salta province. The Mariana project is on the Llullaillaco salt flat, situated less than 140km south of Chile’s Atacama salt flat, the largest producing lithium brine deposit in the world. Gangfeng are already operational in the area with the Cauchari-Olaroz JV which is set to imminently enter production.



US car companies are also investing in Argentinian projects in a bid to secure their future lithium supply. General Motors will prepay lithium company Livent US$198m for a guaranteed six-year supply deal. Livent has lithium mining plants in Argentina and processing facilities in the US. Livent will supply an undisclosed amount of battery-grade lithium hydroxide to GM as from 2025. This supply agreement will ensure enough raw materials for GM to produce 1m EVs in North America by 2025.

Ford signed a non-binding deal to buy 25ktpa of lithium from Lake Resources' Kachi project. The deal between Lake and Ford is a major bet on direct lithium extraction (DLE) which promises to produce cheaper, higher quality, and more environmentally friendly lithium than traditional processes.

DLE uses a process that involves a highly selective absorbent to extract lithium from brine water, but its viability has not yet been proven commercially. The Kachi project, in Argentina's Catamarca province, is expected to cost about US$544m, produce 25,500tpa of lithium carbonate, and come online by 2024.

Ford is also planning to become the foundation customer of Rio Tinto’s Rincon project in the Salta province. The two companies signed a MOU to jointly develop more sustainable and secure supply chains for battery and low-carbon materials to be used in Ford’s vehicles. Rio Tinto recently approved a US$190m investment to develop a starter plant, designed to produce 3ktpa of lithium carbonate, at its Rincon project.


Bolivia’s Salt Flat Struggles

Bolivia is home to the Salar de Uyuni, the world’s largest untapped lithium resource. The country has struggled for decades to mine lithium commercially, lagging far behind Chile and Argentina. Bolivia lacks the investment, mining infrastructure, legal framework, and technical know-how to take advantage of its vast lithium-rich salt flat.

Bolivia’s President Luis Arce aims to transform Bolivia into the world capital of lithium, supplying up to 40% of global supply by 2030. While it is an ambitious goal, now might be the right time for Bolivia to kick-start its lithium industry as automakers race to secure their supply.

Bolivia has spent millions of dollars on brine extraction through conventional evaporation ponds with little lithium to show for it. The technical challenge is mostly due to the high concentrations of magnesium in the brine, making lithium extraction complex. The government is now betting on DLE technology to solve the issue and welcoming bids from DLE focused companies.

In June, six companies were shortlisted, including Lilac Solutions & CATL. Lilac Solutions recently constructed a DLE demonstration plant at Lake Resources’ Kachi project in Argentina. The companies will have to prove their DLE technology, which are unproven at a commercial scale, in the Bolivian salt flats.

Bolivian law currently does not permit foreign companies to mine lithium, with only state-owned company Yacimientos de Litio Bolivianos (YLB) allowed to do so. It is unclear if the shortlisted foreign mining companies will be able to bypass this restriction if they partner with YLB.