Using 'lithium' to analyze supply-demand changes in 2025: What posture will enable a turnaround from困境 (predicament)?

Let’s begin with a real anecdote illustrating the operational difficulties facing Australian mines: In November 2023, MRL acquired the Bald Hill project—bankrupt since 2018—and rapidly advanced its restart; yet by November 2024, MRL announced the mine’s suspension of operations (due to significant financial pressure). Albemarle and MRL’s Wodgina project completed its production lines but left them idle; Pilbara shut down high-cost operations to redeploy capacity toward lower-cost expansions; Ganfeng and MRL’s Marion mine shifted to a high-grade strategy—reducing output and delaying underground mining investments; Arcadium’s Cattlin mine ceased operations; Finniss—the first greenfield lithium project to commence production in Australia—ceased operations less than one year after its initial production. All currently operating projects have been affected, and mounting cash-flow pressures on mining companies have driven negative growth in Australian lithium capacity. Now, the pressure shifts to two newly commissioned mines in 2024: SQM’s Mt Holland project maintains acceptable cost levels, whereas Liontown’s Kathleen Valley project—employing underground mining—faces elevated costs, potentially jeopardizing its cash flow and exposing it to operational challenges similar to those afflicting older mines. Albemarle’s earlier acquisition attempt of Kathleen Valley was blocked; the asset may therefore require another round of sale negotiations with alternative miners. The situation confronting Australian miners is widespread. Elsewhere, any producers whose cost curves cannot compete with established Australian mines likely face analogous constraints—though statistical reporting conventions may obscure this reality. South American Brine Operations Argentina’s brine projects have experienced repeated delays and protracted ramp-up periods (12–18 months) before achieving scale. Although resource grades are generally high-quality, new projects still incur relatively high costs. A representative case is Zijin Mining’s 3Q brine project: following trial operation at end-2023, progress stalled—costs being among the key reasons. In H2 2024, POSCO’s Sal de Oro brine project and Eramet’s Centenario-Ratones brine project were completed. Curiously, Tsingshan Group—having built Centenario-Ratones for Eramet—immediately transferred its equity stake and exited. Arcadium has repeatedly postponed its two Argentine brine projects, awaiting Rio Tinto’s takeover before finalizing development plans. Beyond the uncertain restart of the 3Q project, Argentina’s incremental supply in 2025 includes Ganfeng Lithium’s Mariana project, which commenced trial production at end-2024. Overall, Argentine supply is already experiencing a 2025 shortfall. Additionally, Lithium Americas (LAAC, formerly LAC) plans to relocate its headquarters from Canada to Switzerland in 2025. Its partner Ganfeng Lithium has pledged not to acquire controlling interest for three years—a move that ironically draws attention to their close control over roughly one-third of Argentina’s long-term lithium capacity. SQM’s joint venture with Chile’s state-owned copper company Codelco became effective in early 2025. Codelco holds 50% plus one share (effectively nationalizing the venture) and receives approximately 70% of the JV’s operating profits—meaning SQM’s net profit is roughly halved versus pre-JV levels. Leveraging its world-leading low-cost Atacama brine assets, SQM expands capacity by 40,000 tonnes to reach 280,000 tonnes in 2025 (210,000 + 30,000 → 240,000 + 40,000), though its production guidance remains at 230,000 tonnes. Chile’s new model of state-led partnership—pioneered by SQM—is now being widely rolled out via competitive tenders. Dozens of projects are being offered under public-private partnership frameworks—including bids invited from Rio Tinto, LG, POSCO, Eramet, Albemarle, SQM, BYD, Ganfeng, Minmetals, Tianqi, and CMOC—providing long-term supply support further into the future.

In-depth industry research on chemical new materials: phosphorus chemicals, fluorine chemicals, lithium, and rare earths

The Cauchari project is located in the Puna region, 230 km west of San Salvador de Jujuy City in Jujuy Province, northern Argentina, at an elevation of 3,900 meters. The concession covers 27,772 hectares. Lithium concentrations in the brine range from 157 to 956 mg/L, averaging 512 mg/L, with total resources estimated at 6.3 million tonnes LCE. The Olaroz salar (dry salt flat) is also situated in the high-altitude Puna region of northwestern Argentina. It lies beneath a structural sedimentary basin covering over 500 km², with aquifers exceeding 600 meters in depth. These aquifers are rich in lithium, potassium, and boron. Lithium concentrations range from 310 to 1,200 mg/L, averaging 796 mg/L, with total resources of 1.5 million tonnes LCE. Olaroz’s Phase II expansion was originally scheduled for completion and commissioning between late 2020 and mid-2021, but pandemic-related delays pushed timelines back. As of now, roughly 50% of construction is complete, with commissioning expected in early 2022 and full nameplate capacity of 25,000 tonnes LCE anticipated by early 2024. Additionally, Naraha lithium hydroxide plant in Japan—scheduled for commissioning in 2022 with 10,000-tonne annual capacity—will source its raw lithium feedstock primarily from Orocobre’s (now Allkem’s) second-phase South American brine facility. Ganfeng Lithium / Lithium Americas (LAC) — Cauchari-Olaroz Project (under construction): Designed to support annual production of over 40,000 tonnes of battery-grade lithium carbonate for more than 40 years. Ganfeng announced in 2019 that the project would be completed by end-2020, though actual progress lagged. A May 2021 announcement indicated an expected start-up in Q3 2022. Following commissioning of Phase I (40,000 tonnes/year battery-grade lithium hydroxide), Phase II—adding 20,000 tonnes LCE/year of lithium carbonate capacity—is slated for commissioning in 2025. The project employs solar pond–precipitation technology, with evaporation pond design referencing SQM’s Atacama process. Eramet (Eramet) – Cordillera Project (under construction): Eramet holds extraction rights to the Cordillera salar lithium deposit in northwestern Argentina, at 3,800 meters elevation. Since 2010, the company has invested in R&D for extracting battery-grade lithium carbonate from brine, securing ten patents. The Cordillera salar hosts proven lithium resources of 10 million tonnes LCE, with an average lithium grade of 366 mg/L. Eramet obtained its mining license for the Cordillera salar in 2014 and completed environmental and social impact assessments in 2019. Using its proprietary adsorption-based direct lithium extraction (DLE) technology, Eramet is building a 24,000-tonne lithium carbonate plant, scheduled to begin construction in 2022 and enter early production in 2024. Domestic brine resources—China’s salt-lake lithium projects—hold substantial development potential, yet remain constrained by suboptimal resource endowments.

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