Focus On The Puna Plateau – ‘Saudi Arabia Of Lithium’

Summary

  • Overview and History of The Puna Plateau.
  • Update on what is happening in: Bolivia, Argentina and Chile.
  • Review of investment opportunities with leading chemical companies operating in the region.

The Puna Plateau is an area of the Andrean Mountains that reaches elevations of 4,000m and spans 1,800km across Argentina, Bolivia, and Chile. It houses the largest proven deposit of lithium, referred to as the “The Lithium Triangle,” and consists of three major salt lakes: Salar de Atacama, Salar de Uyuni, and Salar de Hombre Muerto. The Puna Plateau is referred to as the “Saudi Arabia of lithium” as it holds approximately 70% of the global reserves, making it an attractive area for both junior exploration and large mining companies.

‘Brine’ is water saturated with a high concentration of salts such as that found in salt lakes, or a salar. Concentrated brine water is extracted from below the Earth’s surface and cycled through a pond evaporation process, which can take from 12-24 months; as the brine water begins to evaporate, lithium and other by-products are harvested, including potassium and boron.

In the 1990s, a large investment of approximately $150million by an American chemical company spurred interest in the Puna Plateau. In recent years, a significant number of junior exploration and mining companies have flocked to this part of the globe to unlock further value as the demand for lithium has doubled over the past decade and is expected to double again by 2020. The increase in demand comes from the rapid adoption of lithium ion batteries to a wide range of mobile applications such as cell phones, laptops, and power tools, but also its use in new and emerging applications like table PCs, smartphones, and electric vehicles.

The largest deposit sits in Bolivia, a country that has decided to develop the salars with little external support. But in late 2011, the Chinese state company CITIC Guoan Group Corp announced that it had reached an agreement to begin exploration in the Salar de Coipasa. Later in 2012, a consortium of South Korean firms announced that they would build a pilot plant to manufacture lithium cathodes, the main component in lithium ion batteries. Major South Korean electronics firms, such as LG (NYSE:LPL), have indicated that they are seeking to be the number one producer of lithium ion batteries in the coming years. Industry watchers, however, have seriously criticized the Bolivian government for making such slow progress on the project. It is even doubtful that these projects will see life in the coming years as the immediate future sees supply being brought in from Argentina and Chile.

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February 2019
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