Lithium Argentina Q4 2025: Costs Down to $5,618/t and Still Falling
Since the start of 2024, Lithium Argentina (NYSE/TSX: LAR) has done something that most lithium producers have struggled to do in a weak price environment: systematically drive costs down, quarter by quarter. By the fourth quarter of 2025, C1 cash operating costs at the Cauchari-Olaroz brine operation had fallen to USD $5,618 per tonne, a 30% reduction from the $8,042 per tonne recorded in Q1 2024 and below the company’s own long-term cost estimate that was itself revised sharply lower during the year.
That cost trajectory, more than any single quarterly revenue or EBITDA figure, is the central story of Lithium Argentina’s 2025 results. In a market where spodumene converters and hard-rock producers are struggling to cover variable costs, Cauchari-Olaroz has repositioned itself in the first quartile of the global lithium supply cost curve. That competitive position is now the foundation for a fully-financed growth strategy that, notably, does not contemplate diluting shareholders.
Full-year 2025 production reached 34,100 tonnes of lithium carbonate equivalent (LCE), up 34% year-on-year and at the high end of guidance. The operation exited the year running at approximately 97% of nameplate capacity in Q4. With realized prices recovering sharply in early 2026 and two major growth projects in development, the company is making the case that Cauchari-Olaroz’s cost base is durable: not a function of temporary input cost tailwinds, but of deliberate and structural operational improvements.
Key Points
- C1 cash costs fell to $5,618/t in Q4 2025, down from $6,630/t in Q4 2024 and down 30% from the Q1 2024 peak of over $8,000/t. Full-year 2025 C1 costs of $6,108/t came in 14% below the 2024 full-year figure of $7,131/t.
- The company revised its long-term C1 cost estimate from $6,500/t to $5,400/t, a 17% reduction, reflecting durable savings across reagents, maintenance, and camp services driven by process optimization, task internalization, and contract renegotiations.
- Full-year 2025 production reached 34,100 tonnes LCE, a 34% increase year-on-year at the high end of guidance, as Cauchari-Olaroz operated at approximately 97% of nameplate capacity in Q4.
- Cauchari-Olaroz generated $30.4 million in Adjusted EBITDA in Q4 and $55.6 million for the full year. Following year-end, the operation distributed $85 million in cash, with $42 million attributable to LAR’s share.
- Management committed to financing Stage 2 expansion and the Pastos Grandes Project through project-level debt, offtake partnerships, and minority equity, explicitly ruling out shareholder dilution. LAR has not issued a single share for financing purposes throughout the downcycle.
- A $130 million, six-year senior secured debt facility was completed with joint venture partner Ganfeng Lithium at SOFR plus 2.5%, bringing LAR’s Q1 2026 cash position to approximately $95 million.
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Cost Performance: Anatomy of a 30% Reduction
The headline cost number of $5,618 per tonne C1 in Q4 2025 understates what has been accomplished since the project reached nameplate capacity in 2024. When Cauchari-Olaroz was ramping up, unit costs were elevated by underutilized fixed infrastructure and inefficiencies typical of a new operation. What has happened since is more meaningful: a deliberate and line-by-line reduction in variable costs that management believes is structural and sustainable.
“I want to spend a moment on cost, because I would argue this is just as important as the production story, if not more so. Since Q1 2024, cash costs have declined 30% from over $8,000 per ton to around $5,600 in Q4. That improvement is broad-based: reagents, maintenance, camp services, overhead. Every major cost line moved in the right direction. This is not just fixed cost at higher volumes. Much of this reduction is in variable cost driven by our efforts to optimize the operation following the ramp-up.”Sam Pigott, President and CEO, Lithium Argentina
Management broke down the drivers of the full-year improvement in its investor presentation, identifying four categories of savings totalling approximately $1,132 per tonne versus prior-year levels.
| Cost Category | Saving ($/t LCE) | Primary Driver |
|---|---|---|
| Reagents | -$550 | Process optimization and reduced reagent consumption through improved brine chemistry management |
| Maintenance | -$210 | Internalization of previously outsourced maintenance tasks; competitive tendering for remaining contracts |
| Camp Services | -$156 | Reduced personnel headcount as ramp-up phase concluded; renegotiated camp and catering contracts |
| Other | -$216 | Logistics, workforce optimization, and general operating improvements across multiple line items |
The reagents saving is the most structurally significant. Cauchari-Olaroz uses reagents to purify lithium brine into battery-grade lithium carbonate, and reagent consumption is directly tied to the chemistry of the brine and the efficiency of the processing circuit. The fact that consumption has been reduced through process optimization rather than input price declines suggests the savings are durable regardless of where reagent costs move.
What is C1 Cash Cost?
C1 cash cost (or C1 operating cost) is the industry-standard measure of the direct cost to produce one tonne of lithium carbonate equivalent. It typically includes mining, processing, site administration, and on-site logistics, but excludes royalties, sustaining capital, depreciation, and corporate overhead. C1 is used to benchmark where a project sits on the global supply cost curve: operations in the first quartile (the lowest-cost 25% of supply) tend to remain cash-flow positive even in severe commodity price downturns.
Energy costs are notably absent from the reduction story. Cauchari-Olaroz has less than 2% direct energy exposure in its cost base and less than 5% total energy exposure, including indirect costs such as logistics. This is structurally different from hard-rock lithium operations, where crushing, grinding, and flotation are energy-intensive processes. Brine operations largely rely on solar evaporation for lithium concentration, which carries no fuel cost.
The company revised its long-term C1 cost estimate from $6,500 per tonne to $5,400 per tonne, a 17% reduction, reflecting management’s view that the improvements achieved in 2025 represent a new baseline. On the earnings call, CEO Sam Pigott described the $5,400 per tonne long-term target as “very, very real,” noting that the operation had already printed $5,618 per tonne in Q4 2025. He added: “And it is important to note that we are not done.”
Cauchari-Olaroz’s position on the global lithium supply cost curve, shown in LAR’s Q4 investor presentation, places it alongside the lowest-cost brine operations globally, well below the spodumene conversion operations in China and Australia that represent the marginal cost of much of the world’s lithium supply.
Operational Results: High Utilization, Recovering Prices
Full-year 2025 production of 34,100 tonnes LCE represents a 34% increase over 2024 and came in at the high end of the company’s 30,000 to 35,000 tonne guidance range. Cauchari-Olaroz operated at approximately 97% of its 40,000 tpa nameplate capacity during the fourth quarter, with Q4 production of approximately 9,700 tonnes. The $92 million in Q4 revenue was realized at an average price of $9,049 per tonne.
The full-year pricing environment was challenging, reflecting the broader weakness in lithium carbonate markets throughout 2025. Cauchari-Olaroz generated $30.4 million in Adjusted EBITDA in Q4 and $55.6 million for the full year on a 100% project basis, despite the low price environment. Following year-end, the operation made a $85 million cash distribution, with $42 million attributable to LAR’s 44.8% share, bringing the company’s Q1 2026 cash position to approximately $95 million.
The pricing picture has shifted materially entering 2026. Management indicated that realized prices in Q1 2026 are tracking at approximately $17,000 per tonne, nearly double the Q4 2025 level. LAR’s pricing is based on the market price for battery-quality lithium carbonate outside China. That reference price differs from Chinese benchmark prices (such as SMM and Fastmarkets) primarily due to the stripping of VAT from Chinese export prices. Cauchari-Olaroz product then trades at a further mid-single-digit discount to that ex-China reference price, reflecting a market-applied quality adjustment.
What is LCE (Lithium Carbonate Equivalent)?
Lithium Carbonate Equivalent (LCE) is the standard unit used to compare lithium production across different product forms. Whether a company produces lithium carbonate, lithium hydroxide, or lithium spodumene concentrate, all quantities are converted to their equivalent weight in lithium carbonate (Li2CO3) for comparability. One tonne of LCE represents approximately 188 kilograms of elemental lithium. Cauchari-Olaroz produces battery-grade lithium carbonate, so production figures are reported directly in tonnes LCE without conversion.
On the balance sheet, Lithium Argentina held $61.1 million in cash and equivalents as at December 31, 2025, with total assets of $1,099.8 million and total liabilities of $282.8 million. The full-year net loss attributable to shareholders was $76.8 million, which reflected non-cash charges including a $26.1 million recognition of previously unrecognized losses from 2024, a $9.3 million loss on the JEMSE receivable, and non-cash share-based compensation of $15.0 million, among other items.
Growth and Financing: Building Without Diluting Shareholders
The more consequential part of Lithium Argentina’s Q4 communications was the forward-looking financing strategy for two major growth projects. On a conference call that covered several incremental operational items, management delivered a commitment that carries real weight for shareholders wary of equity raises in the current environment.
“We are very confident we will be able to put together a financing package that does not require equity contributions from shareholders. I think that is on the convert. In terms of the financing plan for our growth, Cauchari stage two has stage one as a foundational backstop. At today’s prices, $460,000,000 of EBITDA, which can provide some funding to the project. On PPG, this is a joint effort with Ganfeng, working with some of Ganfeng’s global customers to look at different potential minority partners to bring into that project to provide the majority, if not all, the equity financing required.”Sam Pigott, President and CEO, Lithium Argentina
Stage 2, Cauchari-Olaroz: The Stage 2 expansion targets incremental production of 45,000 tonnes per year from the same salar, bringing total Cauchari-Olaroz output to roughly 85,000 tpa at full build. A development plan is targeted for completion in mid-2026. Management indicated that Stage 2 would be largely funded by Stage 1 cash flows, given the operation’s improving cash generation capacity as costs decline and prices recover. RIGI applications for Stage 2 were filed in December 2025, and Stage 2 environmental permits have also been submitted.
A resource update published alongside the earnings release showed measured and indicated resources at Cauchari-Olaroz increasing by approximately 42% to 28.1 million tonnes of LCE at an average grade of 562 mg/L lithium, positioning it among the largest lithium brine assets globally.
Pastos Grandes Project (PPG): PPG is LAR’s greenfield lithium brine project in Salta Province, being consolidated into a new joint venture with Ganfeng that is expected to close in Q2 2026. Upon closing, Ganfeng will hold a 67% interest and LAR will hold 33%. The project targets 150,000 tonnes per year of LCE across three phases of approximately 50,000 tpa each. A comprehensive Scoping Study filed in December 2025 produced an after-tax NPV of $8.1 billion at an 8% discount rate, with an IRR of 33% at $18,000 per tonne lithium carbonate. PPG received its Stage 1 environmental permit approval in November 2025 and a RIGI application was submitted in February 2026.
What is RIGI?
RIGI, or Regimen de Incentivo para Grandes Inversiones, is Argentina’s large-scale investment incentive framework introduced in 2024. For qualifying projects above a defined investment threshold, RIGI offers significant benefits including a reduced corporate tax rate (from 35% to 25%), accelerated depreciation, import duty exemptions on capital equipment, and protections against regulatory changes for qualifying investment periods. More than $70 billion in investment applications have been submitted or approved under the program industry-wide, reflecting broad adoption by major mining and energy projects in Argentina.
Financing for PPG is structured around bringing in project-level partners rather than issuing LAR equity. The company is working with Ganfeng’s global customers to identify potential minority equity partners and offtake partners, with management noting strong engagement from groups attracted to the project’s scale and cost profile. On the broader non-dilution commitment, Pigott noted that LAR has not issued a single share for financing purposes throughout the challenging 2023 to 2025 lithium price downcycle: “I think that speaks to our discipline and quality of our approach.”
Outlook and Guidance
Production guidance for 2026 is set at 35,000 to 40,000 tonnes of lithium carbonate from Cauchari-Olaroz, with costs expected to remain near $5,600 per tonne. Sustaining capital requirements are projected at $15 million to $20 million per year, reflecting the relatively low ongoing capital intensity of a brine operation at steady-state production.
“Based on our production targets for 2026, Cauchari-Olaroz is expected to support significant EBITDA under a range of lithium price scenarios. Using today’s market price of about $20,000 per ton and the midpoint of production guidance would imply around $460,000,000 in EBITDA for 2026.”Sam Pigott, President and CEO, Lithium Argentina
At LAR’s 44.8% attributable interest, the $460 million project-level EBITDA scenario would represent attributable EBITDA of approximately $206 million, a material step-change from the $55.6 million generated in the full year 2025.
The Stage 2 development plan targeted for mid-2026 is the next major catalyst. Management indicated the plan will provide clarity on capital cost, timeline, and the financing structure for the expansion. For Pastos Grandes, the key near-term milestones are the close of the JV consolidation in Q2 2026, RIGI approval, and finalizing the partner selection process.
Lithium Argentina is also considering a secondary listing on either the Australian Securities Exchange or the Hong Kong Stock Exchange to broaden access to Asia-Pacific investors, while maintaining its existing NYSE listing.
Key Metrics
| Metric | Q4 2025 | Q4 2024 | FY 2025 | FY 2024 |
|---|---|---|---|---|
| C1 Cash Operating Cost (USD/t) | $5,618 | $6,630 | $6,108 | $7,131 |
| Production (tonnes LCE, 100% basis) | 9,700 | 9,383 | 34,100 | 25,304 |
| Average Realized Price (USD/t) | $9,049 | n/d | n/d | n/d |
| Adjusted EBITDA (100% project, USD) | $30.4M | $6.0M | $55.6M | $18.1M |
Figures presented on a 100% Exar (Cauchari-Olaroz project) basis. Adjusted EBITDA is a non-IFRS measure. Source: Lithium Argentina Q4 and Full Year 2025 News Release and Non-IFRS reconciliation tables, March 23, 2026. n/d = not directly disclosed in source materials reviewed.
References
- Lithium Argentina Inc., “Fourth Quarter and Full Year 2025 Results,” Press Release, March 23, 2026.
- Lithium Argentina Inc., “Q4 and Year-End 2025 Investor Presentation,” March 23, 2026.
- Lithium Argentina Inc., “Management’s Discussion and Analysis, Year Ended December 31, 2025,” March 23, 2026.
- Lithium Argentina Inc., “Q4 and Full Year 2025 Earnings Conference Call Transcript,” March 23, 2026.