Lithium prices have risen again in March! The latest report from Benchmark Mineral Intelligence shows that due to strong demand for lithium iron phosphate (LFP) batteries, China's lithium price index continues to soar. The median price of battery-grade lithium carbonate (≥99.0% Li2CO3) in March has increased by 88% since the beginning of the year, reaching $12,600 per ton, the highest level since March 2019.

The latest data released by the Americas Association and the Americas Council shows that global lithium mine sales are expected to grow by 70% in 2021, and the global lithium market is expected to grow fivefold in the next 35 years. Although the COVID-19 pandemic has severely impacted global industries, including mining, the continuous growth in battery demand will keep lithium resource development and application as a hot industry.

Currently, Australia is the largest lithium resource production area in the world, accounting for nearly half of global production. However, this situation may soon change, as the potential of the South American "Lithium Triangle" is about to be released in the short to medium term, with production capacity expected to "explode" in the coming years!

The resources of the "Lithium Triangle" are extremely rich.

At latitudes 18°S to 27°S and longitudes 65°W to 70°W, at the junction of Chile, Argentina, and Bolivia, the Neogene Andean tectonic movement has formed a triangular area densely distributed with salt lakes. The unique arid climate and rich lithium sources make the salt lakes contain a large amount of exploitable lithium mineral resources. This area is vividly referred to as the South American "Lithium Triangle."

The lithium reserves in the "Lithium Triangle" hold an absolute advantage globally. According to data released by the U.S. Geological Survey, the total world lithium resource reserves (metallic lithium) amount to 13.52 million tons, with identified resources of 39.78 million tons. The top six countries in terms of identified resource amounts are Bolivia, Argentina, Chile, the United States, Australia, and China.

The magnesium-lithium ratio of most salt lakes in the "Lithium Triangle" is between 1.4 and 10, generally <8, which is the lowest magnesium-lithium ratio in the world. The concentration of lithium ions in the salt lakes is 0.04% to 0.15%, with good resource endowments and ease of development. Additionally, compared to other regions in the world, the cost advantage of lithium extraction from the salt lakes in the "Lithium Triangle" is significant, making it the region with the lowest production cost of lithium carbonate globally.

The "Lithium Triangle" is currently the region with the most foreign investment companies in lithium mining. In addition to more than a dozen local mining companies, dozens of foreign mining companies from the United States, Australia, Canada, China, Japan, Germany, France, the Netherlands, South Korea, and other countries have invested in numerous lithium mining projects. The attractiveness to foreign capital is unmatched by other lithium resource countries or regions, indirectly indicating the importance of the "Lithium Triangle" in the global lithium resource industry chain.

The potential of the "Lithium Triangle" is about to be released.

Currently, the "Lithium Triangle" has identified lithium mine reserves accounting for about 58% of the global total. Argentina has discovered lithium mine reserves of 19.3 million tons, with confirmed reserves of 1.9 million tons and a production of 6,200 tons, ranking third in the world for confirmed lithium mine reserves and fourth in production. Argentina has formulated an ambitious lithium mine development plan, aiming to increase lithium mine production capacity nearly sixfold by the end of 2022, raising lithium mine export value from $190 million to $1 billion.

Bolivia has discovered lithium mine reserves of 21 million tons, and the Uyuni salt flat, known as the "Mirror of the Sky," is the largest lithium resource point in the world. However, the development of Bolivia's lithium mining industry is relatively lagging, and there is little public data available, making the confirmed reserves unclear.

Chile has discovered lithium mine reserves of 9.6 million tons, with confirmed reserves of 9.2 million tons and a production of 18,000 tons. Chile's confirmed lithium mine reserves rank first in the world. Although Chile's lithium production is not as high as Australia's, ranking second globally, its production cost is only one-third of that of Australia. To attract investors to invest in new mining areas in the north, Chile's mining management department will offer more lithium mining rights this year.

Chile's Minister of Mining and Energy, Juan Carlos Jobet, told Bloomberg that the government will "offer mining rights to new market entrants in a competitive manner."

Major mining companies are also increasing their investments in the region. At the end of last year, Chilean lithium producer SQM announced plans to raise $1.1 billion to increase lithium carbonate production capacity, intending to invest a total of $1.9 billion over the next four years, with the goal of more than doubling Chile's annual lithium carbonate production capacity from 70,000 tons to 180,000 tons.

Overall, the "Lithium Triangle" is undoubtedly the richest region for lithium resources in the world, with good resource endowments and low production costs, making it a hotspot for mining company investments. As lithium extraction technology from salt lakes continues to mature and project funding continues to flow in, the potential of the "Lithium Triangle" may soon be released, with production capacity expected to "explode" in the coming years!

The three major super lithium mine projects in the "Lithium Triangle".

1. Uyuni Salt Flat, Bolivia.

Lithium resource amount: 21.1 million tons.

Type: Brine.

The Uyuni salt flat in Bolivia is one of the largest lithium deposits in the world. In March 2020, Bolivia's national lithium company (YLB) released a report stating that the lithium resource amount of this salt flat is 21.1 million tons. The U.S. Geological Survey (USGS) also considers Bolivia to be the largest lithium resource country in the world. However, Bolivia's lithium production scale is not large. YLB is investing $96.4 million to build a lithium carbonate production plant, with a planned annual output of 15,000 tons. The plant was originally scheduled to be completed in October 2020, but progress has been delayed due to the impact of the COVID-19 pandemic.

2. Atacama Salt Flat, Chile.

Lithium reserves: 8.3 million tons.

Type: Brine.

Chile's Atacama salt flat is another world-class lithium mine. In August 2019, Leonidas Osses, chairman of the lithium committee of the Chilean Mining Engineering Institute (IIMC), revealed that the mine's reserves are 8.3 million tons. Chilean lithium producer SQM is already producing lithium in Atacama and is currently raising funds to significantly expand production.

3. Cauchari-Olaroz Salt Flat, Argentina.

Lithium resource amount and reserves: 5.3 million tons.

Type: Brine.

The measured and indicated lithium resource amount of the Cauchari-Olaroz salt lake is 3.73 million tons, with inferred resources amounting to 887,300 tons, and proven and probable reserves totaling 682,900 tons. According to data from the United States Geological Survey (USGS), Argentina's lithium resource reserves are 17 million tons, ranking second in the world. Therefore, the resource reserves of this salt lake account for more than 1/4 of Argentina's total lithium resources. In terms of reserves alone, Argentina's lithium reserves are 1.7 million tons, ranking third after Chile and Australia. Lithium Americas and its partners are investing $565 million to build the Cauchari-Olaroz project, which is expected to be operational for 40 years, producing 40,000 tons of lithium carbonate annually. The project was originally scheduled for completion in early 2021 but has been delayed to mid-2021 due to the pandemic.

Some sources: Global Network, China Mining News, Global Geological Mineral Information System, etc.

Reprinted from: Mining Industry