Orocobre and Lithium Americas each provided progress reports in early May 2011 on their respective lithium brine development projects in Jujuy province, northwestern Argentina. Orocobre reported receipt of a positive definitive feasibility study for its Salar de Olaroz lithium-potash project; Lithium Americas reported filing of the preliminary economic assessment for its Cauchari-Olaroz project, along with an outline of its pro-ject development plans for the remainder of 2011 and early 2012.
Both companies will have to deal with the uncertain impact of a Jujuy provincial government decree issued in early March 2011 that declared lithium a strategic mineral resource and introduced a secondary approvals process for lithium projects in the province. In addition to previously establish approvals, lithium projects now require assessment by a committee of experts and, following a positive recommendation from this committee, approval by a joint resolution of the minister of production and the secretary general of the provincial government.
Orocobre’s Olaroz project is based on a resource of 6.4 million mt of lithium carbonate equivalent. Brine will be pumped from a salar bore field into solar evaporation ponds located on the southwest margin of the salar. Initial production is targeted at 16,400 mt/y of battery-grade lithium carbonate, with an option to produce 10,000 mt/y of potash two years after the start of lithium carbonate production.
Capital cost to develop initial lithium-only production is estimated at $207 million. Project life is estimated at more than 40 years. Cash operating costs are estimated at $1,512/mt for battery-grade lithium carbonate without a potash credit.
Orocobre is working with its partner, Toyota Tsusho Corp., to finalize a joint venture agreement and financing to progress the project to commercial production following receipt of final provincial government approvals.
Lithium Americas’ preliminary economic assessment for its Cauchari project assumes initial production of 20,000 mt/y of lithium carbonate at an initial capital cost of $217 million. Cash operating costs are estimated at $1,434/mt of lithium carbonate. The study provides for a second-stage expansion to 40,000 mt/y. Potash and borax byproducts are not included in the study but have the potential to add value to the project. Resources are sufficient to support a 40,000-mt/y production rate for more than 40 years.
Lithium Americas is working with SGS Lakefield (Canada) on the design of an on-site continuous lithium carbonate pilot plant to produce 99.5% purity lithium carbonate. The plant will be pre-fabricated in Canada, assembled at the project site, and fed from a 1-ha industrial-scale pond, which was completed and filled from a production well in the first quarter of 2011. First production of lithium carbonate is scheduled for the fourth quarter of 2011. Results from ongoing hydrology tests will be used to estimate the extractable brine in the salar and upgrade the current NI 43-101 measured and indicated resource into a proven and probable reserve. A definitive feasibility study is scheduled for completion by the end of the first quarter of 2012.
