TSX-listed Lithium Argentina has confirmed the viable potential of a Stage 2 expansion project at Cauchari-Olaroz, in Argentina.

A scoping study on the Stage 2 expansion contemplates additional production of 45 000 t/y of lithium carbonate, which generates an after-tax net present value of $3.1-billion and an internal rate of return of 28.5% using a lithium carbonate price of $18 000/t.

Lithium Argentina is also progressing plans to accelerate an initial 10 000 t/y of the planned 45 000 t/y Stage 2 expansion using adsorption direct lithium extraction (DLE) technology.

The initial module will enable accelerated incremental production, further demonstrate adsorption DLE performance for the company on a commercial scale and support the phased development of Phase 2. The initial module is expected to come online during 2028.

This optionality allows Lithium Argentina to continue optimising process selection based on recovery, capital intensity, operating costs and execution considerations while leveraging the existing infrastructure and operating platform at Cauchari-Olaroz.

Overall, the $1-billion Stage 2 expansion project will expand the total Cauchari-Olaroz production capacity to 85 000 t/y, over an expected 40-year operating life, subject to regulatory approvals.

The scoping study on the expansion also confirms a competitive cost profile, with estimated operating costs of $5 006/t of lithium carbonate, supported by higher process recoveries and brownfield synergies.

Lithium Argentina plans to fund the Stage 2 expansion using internally generated cashflow and project-level debt, leveraging the cashflow generation of the existing operation.

The company confirms that early-stage site works are underway, including additional brine well development, to support the broader Stage 2 expansion and the initial expansion module. Specific capital expenditure requirements for the initial phase will be available once detailed engineering is completed later this year, with Lithium Argentina also working to finalise its 2027 capital expenditure budget.