Argentina's Cauchari-Olaroz Lithium Project Plans US$1.013 Billion Expansion to 85,000 Tonnes

en.Wedoany.com Reported - Lithium Argentina has announced the results of a conceptual study for the Phase II expansion of the Cauchari-Olaroz lithium project in Jujuy Province, Argentina, which plans to add 45,000 tonnes per year of lithium carbonate equivalent (LCE) capacity, raising the project's total capacity from the existing 40,000 tonnes per year to approximately 85,000 tonnes per year. The study estimates the Phase II expansion capital expenditure at approximately US$1.013 billion, with a designed operating life of 40 years.

Under the conceptual study plan, the expansion works include brine wells, evaporation ponds, processing facilities, energy and waste management infrastructure. Of the total, approximately US$421 million is allocated to brine wells, evaporation ponds and the brine system, US$356 million to processing facilities, US$208 million to infrastructure, energy and waste management, and approximately US$28 million to owner's costs. Based on a lithium carbonate price of US$18,000 per tonne, the project's after-tax net present value is approximately US$3.1 billion, with an internal rate of return of 28.5%, a payback period of approximately 5 years, and an average operating cost of approximately US$5,006 per tonne.

Lithium Argentina plans to implement the additional capacity in phases. The first phase will involve building a 10,000-tonne-per-year modular adsorption-based direct lithium extraction (DLE) facility, targeting production in 2028. Related engineering design has commenced in China, and equipment is planned to be manufactured in China and shipped to Argentina for on-site assembly, with the technology export still subject to approval by Chinese regulatory authorities. The company plans to obtain the permits required for the first phase in the first half of 2027, and early works including new brine wells are already underway on site.

The remaining 35,000 tonnes per year of expansion capacity will be advanced by combining direct lithium extraction with the existing evaporation process. Lithium Argentina stated that operating data from the first 10,000-tonne-per-year module will be used to evaluate the recovery rate and water consumption levels of the adsorption-based direct lithium extraction technology, and will serve as the basis for subsequently expanding the application scope of this technology. The environmental impact assessment application for the full 45,000-tonne-per-year expansion project has been submitted, and the company aims to obtain environmental approval in 2027.

Argentina's Ministry of Economy approved the Cauchari-Olaroz expansion project's participation in the Large Investment Incentive Regime (RIGI) in June 2026. The official approval covers an additional 45,000 tonnes per year of lithium carbonate equivalent capacity, including new production lines, brine wells, evaporation ponds and supporting infrastructure, and requires the project to meet the minimum investment threshold by July 1, 2030. The initial module size in the previous RIGI application was 5,000 tonnes per year, and Lithium Argentina's latest development plan has adjusted the first-phase module to 10,000 tonnes per year.

Cauchari-Olaroz is operated by Minera Exar, with Ganfeng Lithium holding 46.7%, Lithium Argentina holding 44.8%, and JEMSE, a state-owned enterprise of Jujuy Province, holding 8.5%. Phase I of the project entered commercial production in October 2024, with existing nominal capacity of 40,000 tonnes per year of lithium carbonate equivalent.