TORONTO (miningweekly.com) – Toronto-listed Lithium Americas Corp’s (LAC’s) Cauchari project in Argentina could produce 40 000 t/y of lithium carbonate and would cost around $400-million to build, the company said on Monday.

Announcing a preliminary economic assessment (PEA) for what it has called the third-biggest lithium brine resource globally, LAC mapped out a two-phase plan for the potential mine, with construction on the first 20 000 t/y starting next year and first production arriving in 2014.

This would be doubled by 2016, with phase-two construction expected to begin in 2016.

The company's share price climbed 13% in Toronto, with the stock changing hands for C$2,27 at 10:47.

“Having already defined the world's third-largest lithium brine resource, we are now looking forward to developing a long-life, low-cost operation, in an industry with a significant expected increase in demand over the foreseeable future,” CEO Waldo Perez said in a statement.

According to the PEA, which ARA WorleyParsons prepared, the first phase would cost $217-million, with phase two’s capital costs estimated at $181-million.

The base-case study assumed a long-term lithium carbonate price of is $5 500/t and cash operating costs of $1 434/t.

LAC will now build a lithium carbonate pilot production facility at Cauchari and complete a definitive feasibility study.

Canadian automotive supplier Magna owns 13% of LAC and Mitsubishi Corp owns 4,1%. Car makers have been taking strategic stakes in lithium juniors to secure supplies to the material they use to make batteries for electric cars.

A Chevrolet Volt, for example, uses 10 kg of lithium carbonate.

The lithium deposits straddling the Andes in Argentina and Chile account for 80% of global lithium brine reserves, and about half of the world’s production.

The Cauchari project also contains potash, which was not included in the preliminary study.
 

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