In September, Lithium Americas (LAC) released an update to its 2018 Cauchari Olaroz feasibility study detailing a 40ktpy LCE capacity project, compared to the 25ktpy LCE project assessed in the previous study. The updated DFS comes at the same time as LAC reduces its proposed production target at the Thacker Pass project.
The increase in design capacity at Cauchari Olaroz has incurred a rise in operating costs on a US$/t LCE basis with the greatest increase coming from the cost of reagents used in the processing of brine. In the case of typical brine operations, these are chemicals and compounds including soda ash and lime. LAC states that the increasing operating cost is caused by “process changes designed to consistently achieve more stringent low impurity specifications of battery material customers”.
The significant increase in reagent costs comes, most likely, as a result of a focus on producing battery grade carbonate. Other operations producing in Argentinian salars have experienced difficulties with impurities, particularly Na and K, preventing production of battery grade carbonate reaching capacity. LAC’s statement regarding the increased reagent costs appears to corroborate this, while also denoting feedback from downstream customers that achieving a low impurity content is vital to producing a competitive battery grade product. With Ganfeng becoming a major investor in the project, it’s probable that LAC is investing heavily in ensuring it produces a viable battery grade product in order to fulfil its obligation as part of the investment deal.
Issues surrounding impurities will continue to cause problems in brine operations, particularly at new operations, until significant process breakthroughs are made and percolate through the community. The fact that the lithium industry is so young means that expertise is at a premium and teething problems around the manufacturing process are to be expected. With short term lithium prices uncertain, and forecast to remain depressed into the near future, the projects that succeed will be those with the expertise to reduce risk in their processing flowsheets and guarantee a reliable product.
Roskill’s NEW Lithium Market Outlook to 2028 report and NEW Greenfield Battery Raw Material Projects for the 2020s report were published in June/July 2019. Roskill’s Lithium cost model can be ordered here.