Mining in the Lithium Triangle
The Lithium Triangle, or Triángulo del Litio, is an area in South America stretching
over Bolivia, Argentina and Chile. The Lithium Triangle contains more than half
of the world’s known lithium resources.
We take a look at the listed companies mining lithium in the region.
Lithium Triangle – Resources & Reserves
Source: U.S. Geological Survey, January 2023. Figures in millions of tons.
Resources– identified Lithium resources
Reserves– can be economically extracted or produced using existing technologies
Features of the Lithium Triangle
High Altitude
The triangle rests in the Andes mountains, and the lithium resources sit at very high altitudes.
Brines (not hard rock)
Lithium here is found in brines which are pumped from the ground and stored in evaporation ponds.
Low Cost
The brines in the Lithium Triangle have some of the highest known concentrations of lithium, resulting in some of the world’s lowest-cost lithium mines.
Lower Carbon Footprint
Lithium from brines has 3x fewer carbon emissions compared to lithium from hard rock deposits, according to IEA data.
Lithium Resources by Country
Source: U.S. Geological Survey, January 2023
Production Facilities
There are two lithium mines in the Salar de Atacama, which holds around 80% of Chile’s Lithium. One is operated by Sociedad Química y Minera (“SQM”), and the other is operated by Albemarle. Both companies rent concessions on leases from CORFO, a government entity.
Salar de Atacama
- World’s 3rd largest salt flat – 3,000 km2 (1,200 mi2)
- 3,656 m (11,995 ft) above sea level
- Host to more than 15% of the world’s known lithium reserves
- Atacama possesses the world’s highest-grade lithium
- Around 1/3 of the global lithium output is produced in Salar de Atacama
- The Atacama is one of the driest deserts on Earth, which helps reduce the amount of time it takes for the brine to evaporate.
CORFO (Corporación de Fomento de la Producción)
- The Production Development Corporation (Corporación de Fomento de la Producción or “CORFO”), a Chilean government entity.
- Rights to lithium resources in Chile are owned by CORFO and leased to SQM and Albemarle.
- CORFO sets extraction limits and takes a hefty cut of the profits (See the full royalty rates table in appendix 1)
- For every $1 over $10/kg LCE, Albemarle pays $0.40 to CORFO. In 2022, global spot LCE prices reached $80/kg.
CORFO Royalty Rates
| Lithium Carbonate | Lithium Hydroxide | ||||||||||
| Price Range (USD/ton) | Progressive Commission Rate (%) | Price Range (USD/ton) | Progressive Commission Rate (%) | ||||||||
| 0-4,000 | 6.8% | 0-4,000 | 6.8% | ||||||||
| 4,000-5,000 | 8% | 4,000-5,000 | 8% | ||||||||
| 5,000-6,000 | 10% | 5,000-6,000 | 10% | ||||||||
| 6,000-7,000 | 17% | 6,000-9,000 | 17% | ||||||||
| 7,000-10,000 | 25% | 9,000-11,000 | 25% | ||||||||
| Over 10,000 | 40% | Over 11,000 | 40% | ||||||||
Source: Albemarle
Codelco / Nationalization
In April 2023, President Gabriel Boric announced a plan to dramatically overhaul Chile’s lithium industry.
Boric stated: “Any private company, whether foreign or local, that wants to exploit lithium in Chile must partner with the state. […] This is an opportunity for economic growth that will be difficult to beat in the short term.”
Some of the major takeaways:
- Chile has tasked Codelco, a state-owned copper mining company, with overseeing lithium nationalization.
- The plan is for the formation of a new state-owned lithium company that will hold a majority stake in all lithium mines.
- Current contracts for SQM and Albemarle will be respected.
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- SQM’s contract ends in 2030 while Albermarle’s extends to 2043.
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Production Facilities
There are 3 lithium production facilities currently in operation in Argentina.
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- Livent’s operation in the Salar del Hombre Muerto.
- Allkem’s project further north in the Salar de Olaroz.
- The Cauchari-Olaroz project joint owned by Lithium Argentina and Ganfeng.
Capacity is expected to scale rapidly as Argentina currently has the largest pipeline of new lithium projects anywhere in the world. The pipeline includes projects from Ganfeng, POSCO, Eramet and Rio Tinto.
Recent Capital Markets Activity
- In May 2023, Livent and Allkem announced plans to merge into a single company, with Livent CEO Paul Graves leading the combined company. Merger Announcement Presentation.
- In October 2023, Lithium Argentina was formed through the separation of Lithium Americas Corp.’s North American and Argentinian assets. Lithium Argentina is now listed on the NYSE with the ticker LAAC.
Production Facilities
Despite having the largest lithium resources of any country in the world, Bolivia has very little lithium production.
The rainfall in Bolivia extends the amount of time required for brine to evaporate in evaporation ponds.
Yacimientos de Litio Bolivianos (YLB), a state-owned lithium firm, is the only company allowed to extract lithium in Bolivia.
YLB has struggled to produce significant amounts of lithium. Reuters reported that the country has “poured hundreds of millions of dollars into traditional evaporation ponds that have produced little lithium, due in part to high naturally occurring concentrations of magnesium.”
Salar de Uyuni
- World’s largest salt flat – 10,000 km2 (3,900 mi2)
- 3,656 m (11,995ft) above sea level
- Single largest deposit of identified lithium resources in the world
- Filing location for Star Wars: the Last Jedi and other movies
Lithium Triangle FAQ
Which companies mine in the Lithium Triangle?
- The companies with active mining operations in the lithium triangle are SQM (Chile), Albemarle (United States) in Chile, Livent (United States), Allkem (Australia) and Lithium Argentina (Canada) in Argentina.
- Argentina has a pipeline of potential future projects by Posco (South Korea), Zijin Mining (China), Rio Tinto (Anglo-Australian), and Ganfeng (China).
- The Bolivian government has chosen CATL (China) to assist in the development of its lithium resources.
How much of the world’s Lithium is in the Lithium Triangle?
53.4% of the world’s lithium resources lie in the Lithium Triangle countries of Argentina, Chila and Bolivia according to the U.S. Geological Survey’s 2023 Mineral Commodities Summaries.
Bolivia has 21.58% of global resources, followed by 20.55% and 11.3% for Argentina and Chile respectively.
How is lithium mined in the Lithium Triangle?
- Lithium in the Lithium Triangle is found in underground brines that is pumped to the surface into evaporation ponds.
- The sun evaporates the water over several months, leaving a brine with a higher lithium concentration.
- The material is then converted into lithium chemicals, primarily Lithium Carbonate and Lithium Hydroxide.
How large is the Lithium Triangle?
According to the U.S. Geological Survey, “The Lithium Triangle is approximately 400,000 km2 and encompasses about 150 internal drainage basins in northwestern Argentina, western Bolivia, northern Chile, and southern-most Peru.”
Does Argentina have Lithium mines?
- Yes, Allkem, Livent and Lithium Argentina are currently mining lithium from evaporation ponds in Northern Argentina and producing lithium chemicals.
- Argentina also has numerous projects in the pipeline including projects owned by POSCO, Zijin Mining, Ganfeng, and Rio Tinto.
Does Bolivia have Lithium mines?
- Despite having the largest lithium resources in the world, Bolivia has not yet produced lithium on a large scale.
- In January 2023 the country announced it is partnering with Chinese battery firm CATL to develop its lithium resources.