South American Lithium Update

Post available in: English

Argentina, Chile, and Bolivia make up the lithium triangle which is thought to contain roughly half the world’s known lithium. According to the US Geological Survey, Argentina has an estimated 19.3Mt of the world’s 89Mt lithium resources. Bolivia (21Mt), Chile (9.8Mt), and Australia (7.3Mt) round out the top four countries in terms of estimated resources.

In terms of actual output, Bolivian production has been non-existent. Chile was a top global producer until Australia surpassed it a few years ago. The Chilean industry has been held back due to lithium being classified as a strategic mineral requiring special government permissions. Although Chile has been producing lithium for some time, it has been unable to capitalise on its experience and attract the needed investment to grow production. 

The slow growth of the Chilean lithium industry has provided an opportunity for its neighbour, Argentina, who has taken a more liberal approach to develop the industry. The result has been an influx of foreign investment set to pay off over the next few years. In 2020, Argentina produced 33,000t of lithium carbonate, which will increase by 50,000t this year. There are estimates that Argentina could double production in 2023 and hit 175,000t in 2025.

No alt text provided for this image

Argentina has a healthy lithium project pipeline. There are already two projects in production with expansion plans. This year, construction has started on several more projects, and even more projects are being explored.

Operating Projects


  • The project is owned by Livent and started production in 1997
  • The company expanded then initial production to the current 20,000t/y of lithium carbonate. A further expansion will bring production to 60,000t/y by the end of 2025.


  • Olaroz salt flat in Jujuy province produces 17,500t/y of lithium.
  • Operated by Sales de Jujuy, comprising Orocobre (72.68%) and Toyota Tsusho (27.32%), and state-run Jemse.
  • Further expansions will add 25,000t/y of lithium carbonate for a total of 42,500t/y.

Projects in Construction

Cauchari-Olaroz Project

  • The Cauchari-Olaroz lithium project is a 40,000 tonnes per annum (tpa) lithium brine project with a useful life of around 40 years.
  • The US$741mn project is a joint venture between Lithium Americas Corp (LAC) and China-based Ganfeng Lithium.
  • Construction is 90% completed. Access roads, platforms for the wells, warehouse buildings, a gas pipeline, a lime plant, a 33kV power line, a 13.2kV distribution line, solid-state lighting and water pipes are complete.
  • Key areas of the processing plant are being prepared to begin commissioning shortly, supported by the completion of the power line, gas line and water line connections. But the purification process to achieve battery-grade lithium carbonate is expected to start only early next year.
  • Lithium Americas and Ganfeng have begun planning stage 2, involving at least 20,000t/y, and continue to advance the development of the exploration well field. Stage 2 is expected to start in 2023.

Centenario-Ratones Project

  • Eramet will control the project with a 50.1% interest and retain operational management responsibility; its partner Tsingshan will finance the plant construction in exchange for a 49.9% interest in the project.
  • A pilot plant was installed in early 2020, providing a real-world demonstration of the quality of the lithium carbonate product, with a very high direct extraction efficiency (90%).
  • The project will use Eramet’s direct lithium extraction technology, minimising water,
  • Construction of the lithium plant began in June 2022 with an initial capacity of 24,000t/y of lithium carbonate starting in 2024.
  • The project is expected to require an investment of US$400m. Production is expected to start in 2024.

Sal de Oro

  • Posco started construction of an US$830 million lithium hydroxide plant this year.
  • The plant will produce 25,000t/y of lithium hydroxide – enough to make batteries for 600,000 electric vehicles – starting in 2024.
  • Environmental impact studies being carried out to increase the production capacity from 25,000tpy to 100,000 were analyzed. This production level will be reached by 2026 and will require an estimated total investment of US$4bn.

Sal de Vida

  • Allkem (formerly Orocobre) is the project owner. The project has a total planned capacity of 45,000tpa.
  • The project development is divided into three stages. The first two stages will involve the evaporation and production of primary-grade lithium carbonate. The third stage involves refining the primary carbonate into battery-grade lithium products.
  • Stage 1 construction has already started, with the first pond completed and filled with brine. Commissioning the first string of operational ponds and construction commencement of the carbonation plant and progressing towards operational readiness started in the second half of 2022. Stages 2 and 3 will start shortly after production in 2023.


Argentina faces the same environmental concerns as Chile regarding expanding lithium production. Communities are worried about disrupting fragile ecosystems by taking water from critical areas. Many companies are focusing on DLE to reduce water usage, but the technology has not been deployed at scale yet.  

Other challenges include a lack of infrastructure and power where these mines are being built. Many of the lithium projects are in areas to the far north of the country where there has been a lack of government funding over the years.

Lastly, the foreign currency restrictions currently in place also represent a challenge to the sector’s expansion since there are limitations on companies taking profits overseas. For miners, this may not be an immediate concern as they seem to be happy to reinvest profits back into expansions, but for technology and service suppliers, this can create issues. Payment of their services and products are delayed, and they are often pressured to have local entities with no means to repatriate funds.

Added Value

Argentine has inaugurated a US$2.5 million lithium-ion batteries and cells plant in La Plata. The facility is expected to go into production in December, targeting 300 cells of 64Wh per day.

The investment was provided by the ministry of science, technology, and innovation (Mincyt) and the energy and research company YPF-Tecnología. The plant required 200mn Argentine pesos (US$1.5mn) for infrastructure and US$2.5mn for equipment.

Some criticisms of the project are that the battery cost could be higher, given that some components need to be imported.


Argentina has taken a different approach to develop its lithium industry. This has positioned the country as a leading investment destination for lithium production. The lithium pipeline is advancing. New projects will catapult the country into one of the largest global producers putting Chile’s position as the number 2 producer at risk.

Argentina has made a small investment into battery production, which will be beneficial as the country looks to build a value-added industry around its lithium resources. Something that Chile has tried but has been unable to do yet. That investment and know-how from the small pilot could potentially trigger further investment in the coming years.

The bigger story is that Argentina has attracted more investment than Chile. While Chile has created uncertainty around its industry with complex rules, Argentina has made it relatively easy for companies to explore and develop projects. 

There are still challenges for Argentina to overcome. The most immediate challenges are structural debt issues, ever-changing taxation policies, and capital controls. As more projects come online, there will be more focus on the environmental impact it may have on fragile ecosystems. DLE technology is certainly important, but its effectiveness is still in question. Over the next couple of years, these questions should be answered, and hopefully, Chile is not left in the dust. 

Ax Legal is an advisory firm that works with foreign companies in Latin America. Our legal and commercial advisors team has a distinguished track record of helping foreign technology and services companies grow and operate in Latin America. Over the years, we have worked with starts up, mid-size businesses, and publicly listed companies. The common factor that connects our clients is that they are leaders in their field, providing innovative technologies and services to the industrial sectors.

Source: Cody Mcfarlane at

(Visited 83 times, 1 visits today)

About Geoffrey W W McRae

With a highly distinguished career spanning more than three decades across five different countries, New Zealander Geoffrey McRae has established himself as a leading authority on South American real estate, agricultural, and commercial matters. As the founder of Gateway to South America – a real estate consulting group specialising in six South American countries – Geoffrey has developed a reputation for discretion, expertise, and experience that has seen him represent some of the most prestigious clients in the region. His deep knowledge and experience of South American markets have placed him at the forefront of the industry and given him the opportunity to guide and advise with confidence and surety. His long and successful career – which continues to evolve and expand daily – is a testament to his talent, tenacity, and ambition.

Want an edge on investing in Latin America? Get our Investment News first: Join 39,400 subscribers without cost to our English, Spanish or Portuguese posts for the latest real estate news in LATAM useful for new and experienced investors. Please note, this subscription is for Investment News only, not properties for sale.

Post available in: English

Comments are disabled
Real Estate and Investment News from South America
Visit us on LinkedInVisit us on FacebookVisit us on TwitterVisit us on Pinterest