June/July 2014

Return on evaporation

Enirgi Group are determined, with their brine operation high on the salt flats of Argentina, to provide battery-grade lithium to meet the expected growth spurt in the electric-vehicle sector

By Pierrick Blin and Antoine Dion-Ortega

ADY Resources and its parent company, Canadian-based Enirgi Group, are about to reap the benefit of years of hard work, patience, persistence and technology development in the Argentine salt flats known as salars. Together, they are poised to become a player in the global lithium market, aiming to construct and operate a 25,000 tonne-per-annum lithium carbonate operation in 2017.

On the road that crosses the Argentine province of Salta up to the Chilean border, llama herds are the only obstacles holding drivers back in this wide-open landscape.

It takes four hours to drive from the provincial capital of Salta to the Rincón Salar, a 400,000-hectare crust of brown and white minerals. The region, known as the Lithium Triangle (see sidebar), is the setting for most of the South American salars, trapped between Andean volcanic chains at the junction of Argentina, Chile, and Bolivia.

Fifteen years ago, Daniel Galli, an original member of the ADY team, was concentrating on the sodium sulphate resources in the Rincón Salar, where he had secured numerous claims. The lithium rush that started around 2004 prompted a change of focus. The price of lithium carbonate, which was less than US$2,000 per tonne in 2000, surged under the growing demand for lithium batteries from the electronics market. When it met its peak at US$7,500 per tonne in 2007, Galli was developing a process to extract lithium with Admiralty Resources, the original project owner. Admiralty ran into financial trouble, and the project attracted attention from other investors.

In late-2009, the project was acquired by Sentient Group, an independent Australian private equity investment group specializing in the global resources industry. The lithium carbonate market has stabilized since then at US$5,000 to US$6,000 per tonne, with producers ramping up to satisfy a ballooning annual global demand, which is now about 217,000 tonnes per year. Market research firm Roskill estimates that number will likely reach 238,000 tonnes by 2017. Add to that the recent announcement from the electric automobile manufacturer Tesla of its proposed US$5-billion lithium-ion battery plant, and the potential for sustained growth looks good. In 2020, the company plans on producing more lithium ion batteries each year than were produced worldwide in 2013. “This news is a positive sign for the industry but it also means that important decisions will have to be made by credible lithium producers if the ‘lithium genie’ is to be released from the bottle,” says Wayne Richardson, president and CEO of Enirgi Group. “In the race to bring on new supply to support future plans such as the Tesla ‘gigafactory,’ lithium producers must invest heavily into properly defining their resource – those who do not will lose to the companies that have demonstrated a low-cost position underpinned by technology, a long-life extractable resource, and the expertise to bring the product to market,” concludes Richardson.

Volcanic dust

The richness of the Rincón Salar is derived from the neighbouring hills. “Lithium is found in the surrounding volcanic rocks, ignimbrite and tuff rocks where lithium concentration often reaches 70 parts per million,” says Sergio Lopez, geological consultant and manager at IMEx Salta. For two million years, physical erosion has drawn lithium along with other minerals from these rocks. Carried by rain, these ions cascade down the slopes and are entrapped in vast basins. Minerals have been accumulating and, under the effect of natural evaporation, concentrating to levels in the range of 0.1 per cent. In this mix are magnesium, potassium, and sodium chloride, which ended up forming the salars – huge porous sponges soaked with brine.

Each salar has its own unique characteristics. The mature ones have rich mineral concentration in their brines and a brownish, sharp crystalline crust, whereas younger ones are often dazzling white lakes resembling vast ice rinks.

Producers in the Lithium Triangle are looking for porous formations from which the brine can be effectively pumped out like an oil reservoir. Homogeneity is also an asset. Low magnesium concentrations are ideal because they limit the cost of separating the unwanted mineral.

Enirgi Group has consolidated ADY’s claims on the Rincón Salar, a 1,000-metre deep mature salar with a 0.045 per cent lithium concentration – which ranks lower than salt flats such as Atacama (0.14 per cent) but higher than many others in the region, and the lithium is easier and less costly to extract.

In 2011, Sentient transferred ownership and management of its lithium assets to its Canadian subsidiary Enirgi Group as a precursor to funding the first full-scale plant expansion.

That same year, Enirgi Group launched its pilot plant to further develop its process to improve extraction performance and to evolve the technology before ramping up to larger-scale production. Trial batches are being continuously tested and the quality improved to meet customer specifications in North America, Asia, Europe, and locally in Argentina. Enirgi Group plans to construct a commercial facility in 2015 and begin producing in 2017.

An elusive mineral

From the air, a lithium project could well be mistaken for an exotic resort, with beautiful blue and green pools set side by side in the middle of a crystalline flat, surrounded by dramatic mountain ranges.

Currently, to extract brine for the pilot process, ADY has constructed a series of 30 by 100- metre-wide pools about one metre deep, called natural ponds, where brine naturally accumulates and concentrates. However, to supply brine for full production, ADY will sink production wells some 20 to 60 metres deep into the salar to pump the brine. The brine is pumped into a series of shallow, lined pools where the sun and wind accelerate the evaporation process, concentrating the lithium. A portion of the undesirable minerals that are less soluble are eventually precipitated to the bottom, just like a glass of salt water left to sit on the counter.

The main challenge in the extraction process is the presence of magnesium. It is primarily precipitated out using lime. In the original process, calcium and remaining magnesium bond with sodium sulphate and, when pressed through a filter, large tablets of gypsum with magnesium hydroxide are left behind. “This is the most potentially deleterious waste in the process,” says Carlos Galli, Daniel Galli’s son, and the general manager of operations for ADY Resources, as he crumbles a piece of gypsum with his bare hands. “And it’s not dangerous.” In the commercial plant, though, the filtering process will be upgraded so that it will not need sodium sulphate anymore, further reducing costs.

As lithium remains soluble until the end, it is finally extracted by heating the brine to 90 degrees and adding sodium carbonate. At this temperature, the lithium attaches itself to the carbonate and precipitates. Once dry, the lithium carbonate resembles table salt. “Unlike lithium metal, lithium carbonate is benign and safe to transport,” says Carlos. “The whole process brings lithium concentration from 0.045 per cent in the brine, to 18.0 per cent in the final product.”

The most abundant byproduct of this process is naturally occurring sodium chloride – table salt. However, bringing it to market is out of the question for ADY. Local communities, from which the majority of the company’s 160 employees come, have been producing it from the salt flats for centuries. Competition from an industrial production nearby would certainly damage their artisanal market. “We don’t wish to create such disruption, and it is not a viable business for ADY,” says Carlos.

The end product

ADY currently produces three grades of lithium carbonate, which are exported to global markets in 700-kilogram packages, mostly for glass, ceramic and battery production. The carbonates generated by ADY are all 99 per cent pure, but the composition of the one per cent of impurities varies depending on the customer. Battery producers are especially demanding. “For automobile batteries, the level of quality is much higher,” explains Galli. “The [preferred] concentration reaches 99.3 per cent, and even up to 99.5 per cent. The secret is managing the impurity distribution.” Impurities include calcium, magnesium, sodium, potassium and boron. Although clients from any industry would rather reduce impurities to a minimum, lithium battery producers have much higher standards than those in the glass and ceramic field. The “battery grade” thus requires an extra refining step.

ADY has been refining its extraction process for seven years now. In 2012, after substantial investment, ADY produced its first commercial quantities of lithium carbonate and has gradually raised its annual production rate. Enirgi Group’s initial goal is to build a facility with a 25,000-tonne capacity by 2017 – expected to cost at least US$200 million – with the determination to be one of the top three global producers.

Step by step

The pilot plant was critical in refining the trial process, as it has become clear that it is necessary to make changes before scaling up to a larger plant. “It’s like being at school,” says Carlos. “The intermediate steps we are taking right now are allowing us to gain a deep understanding of our resource and the technical challenges.”

As part of this careful progression, Enirgi Group decided to build a demonstration plant of the commercial process to validate it at higher production volumes. Constructed in Sydney, Australia, the plant will be shipped to the high-altitude Rincón Salar to verify it performs well at 13,500 feet above sea level. With both the process and the engineering in hand, ADY will ensure it can compete with other major players in the region, such as SQM and FMC, which already run 45,000- and 23,000-tonne-per-year plants respectively.

A small market with growing competition

man holding lithium Comprised of the northern regions of Chile, Argentina, and the Bolivian South, the Lithium Triangle consists of a series of high and arid plateaus holding numerous salt flats with varying concentrations of lithium. A 2011 U.S. Geological Survey report stated that the region holds more than 45 per cent of worldwide resources. Chile alone produces nearly 33 per cent of the global output.

Interest in the lithium global market has exploded since 2004. Still, it remains a minor commodity market that is barely worth US$1 billion. Chile’s lithium exports are worth a little more than $US200 million, not even equal to half of one per cent of its copper exports.

Lithium is increasingly extracted from pegmatite granite rock. In Canada, two lithium mines were recently launched by Canada Lithium and Nemaska Lithium. “It’s more profitable to produce from salt flats,” says Sergio Lopez, a consulting geologist with IMEx Salta. “While production costs from rock are decreasing and could eventually compete with them, energy and reagents form a large portion of operating costs and today are high.”

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