Looking locally for lithium

The move isn't isolated, after an alarming research paper was presented to EU leaders urging a dire need to diversify away from China towards Africa and Latin America as demand for lithium-ion batteries and fuel cells balloons by 2030. Industry leaders are taking the need to decouple seriously, with Tesla moving ahead on putting its new lithium refinery in Texas online sooner than anticipated, while lithium miners continue development of their new projects, such as those from Lithium South, Alpha Lithium, Sigma Lithium, and Piedmont Lithium.

With its flagship asset located in Salta Province, Argentina, Lithium South Development Corporation is strategically positioned within the world famous Lithium Triangle. With recent developments at the project, LIS appears to be on the cusp of a breakthrough. Located directly next door to Korean giant Posco's $4bn lithium project, Lithium South is reporting the installation of the first production well at its HMN Li Project, with a pump test to follow immediately after the hole is cased and screened.

The announcement came swiftly on the heels of a previous announcement from Lithium South, stating that the company is preparing an updated NI 43-101 Preliminary Economic Assessment (PEA), using a newly upgraded Measured resource of 1.58m tonnes Lithium Carbonate Equivalent (LCE). Taking into consideration current market conditions and pricing for LCE, Lithium South projects that the new report will use an Initial Design Capacity (IDC) of 15,000 tonnes per year LCE production.

The now up-to-date calculation represented a 175% increase through a newly updated NI 43-101 Technical Report in the HMN Li's total lithium brine resource from 571,000 tonnes to 1,583,100 tonnes LCE at an average grade of 736 mg/L, with a low average magnesium (a brine contaminant) to lithium ratio of just 3.27

"We are very pleased with our new updated lithium resource at the HMN Li Project," said Fernando Villarroel, COO and Project Manager for Lithium South. "The quality of the brine has exceeded our expectations."

In addition to the production well's installation, Lithium South is in the process of permitting and conducting evaporation test work.

"We are very excited to be able to increase our total LCE resource by such a wide value," said Adrian F. C. Hobkirk, President and CEO of Lithium South. "With the increase in overall resource, we look forward to developing a larger mining plan."

Also within the Hombre Muertos Salar are properties of Alpha Lithium, which recently saw its shareholders agree to sell 67.4% of the company's issued and outstanding shares to Tecpetrol for roughly C$205m. Prior to the completion of the deal, Alpha Lithium provided a drilling update on two wells on one of its existing properties in Hombre Muerto.

Included in their most recent drilling results, Alpha Lithium reported the first well's average lithium concentration of 784 mg/L, with an average Mg:Li ratio of 2.42, and the second delivering an average lithium concentration of 836 mg/L, with an average Mg:Li ratio of 2.50.

"These results confirm what our world-class exploration team expected all along – that Hombre Muerto is one of the world's finest salars," said Brad Nichol, President and CEO of Alpha.

On the other side of South America, Sigma Lithium Corporation is another lithium player that has recently updated its lithium resource estimate with an approximately 25% potential increase. At its Grota do Cirilo Lithium Project, Sigma Lithium reported the company had increased the exploration potential of Phase 4 to approximately 26 to 30Mt, adding to the previously released June 2023 NI 43-10 Technical Report which cited a mineral resource estimate comprised of 77.0mt of measured and indicated mineral resource grading at 1.43% Li2O and 8.6 Mt of inferred mineral resources grading at 1.43% Li2O.

"Sigma is a current large-scale and low-cost producer but also has mineral resource estimates to potentially surpass 110m tonnes of open pit deposits," said Ana Cabral, CEO of Sigma Lithium. "This scale underscores our strategic relevance to become the foundation of global supply chains that will deliver the decarbonisation of EV batteries."

Beyond Latin America, there's plenty of optimism surrounding potential lithium development in Africa. Despite moving forward on its operations in Canada, Piedmont Lithium embarked on forging the first link of a lithium supply chain in West Africa—at the Ewoyaa lithium project in Ghana, where the company is the second-largest shareholder of the operator, Atlantic Lithium. As per the current arrangement, Piedmont owns a 9% equity interest in Atlantic Lithium, and has also exercised its option to acquire an initial 22.5% interest in Ewoyaa, subject to government approvals.

"Our investment in Ewoyaa will help alleviate potential future US supply constraints and provide crucial resources to help reduce America's dependence on foreign nations, like China," said Keith Phillips, CEO of Piedmont in an email to Bloomberg.

Atlantic Lithium expects the Ewoyaa permitting process to be finalised in H2 2024, ahead of what's being projected to produce feedstock material for another proposed 30,000mtpa Tennessee-based lithium hydroxide conversion facility. Coupling the impact of work being done in Ghana with new drill results in Canada that could lead to mineral resource upgrade, Piedmont is positioning itself to contribute significantly to the global lithium supply.

Among Piedmont's offtake buyers is Tesla, which is working to develop its own lithium refining facility on the Gulf Coast of Texas. According to the company's updated timeline, construction is set to be finished next year, with expected production in 2025.

Previously, Tesla confirmed that it planned to invest $365m in the lithium plant, which would employ about 165 people full-time plus another 250 construction jobs for about two years. The automaker and battery manufacturer announced ground breaking on the project in May, 2023.

"As we look ahead a few years, a fundamental choke point in the advancement of electric vehicles is the availability of battery grade lithium," said Elon Musk, CEO of Tesla at the ground-breaking ceremony. "We intend to continue to use suppliers of lithium, so it's not that Tesla will do all of it."