Lithium has become a hot product over the past two years as it is used to make batteries lighter, charge faster and store more energy than traditional batteries. Lithium-ion batteries have revolutionised the consumer electronics market and the smart phone or tablet that you may well be reading this on. More importantly, they are making the emerging electric vehicle (EV) market and storage for renewable energy generation increasingly viable and affordable.

Millennial has four lithium brine exploration projects in Argentina, which is part of the Lithium Triangle, a cluster of lithium-bearing salt lakes or salars in Chile, Argentina and Bolivia.

Argentina is viewed as the likely source of growth in lithium supply in the Americas due to the large number of brine/containing salars and government support for its mining sector that is keen to promote development without the political strings that is hindering lithium production growth in neighbouring Chile and Bolivia. Importantly, recent investments in the lithium space have shown that Asian consumers are comfortable investing into projects in Argentina and have put a stamp of approval on the country.

Millennial is focusing on its Pastos Grandes project in Salta, Argentina, where confirmation drilling of a resource is underway with plans to develop a resource and complete a preliminary economic assessment by the third quarter. The company is planning a C$15 million equity raise to achieve this. Advancing to complete a feasibility study by the end of 2018 will require a further $25 million, a step that will see the company look to obtain a strategic partner.

The company has set an aggressive development timeline and is looking to be in production at an initial 10,000 tonnes per annum of lithium compounds in 2020. At a rule-of-thumb cost of $15,000 per tonne of capacity, this would cost about $150 million to develop. Millennial would then look to scale-up production on a modular basis up to 25,000tpa.

“The market is growing at about 20,000tpa, but we don’t want to come in with a 40,000-50,000tpa operation and initially produce 10,000tpa as that would be market disrupting,” says chairman Graham Harris.

Each salar is unique in terms of its grade and impurity levels. This impacts plant design and presents technical challenges, as other development projects have found to their cost. Millennial says that the brine chemistry of its Pastos Grandes deposit means that it can use established, traditional evaporation ponds and the same processing technology that US chemical company Albemarle has used at its Silver Peak operation in Nevada, US for 50 years. A series of evaporation ponds will concentrate the brine to 2-2.5% lithium, which can be further concentrated to 6% before entering the plant to produce end products such as lithium carbonate and lithium hydroxide.

“All brines are not equal and what separates us is that the project lends itself to conventional extraction technology. We have tried to steer clear of having to develop new technology so we will use traditional evaporation ponds and the Silver Peak technology,” he says.

Expertise is key

Unlike gold or copper, lithium is a specialty chemical and products need to be qualified by consumers because the product characteristics and specifications are so much more important, which means that knowledge and experience are key success factors. With so few lithium producers globally, even the major mining engineering houses do not have a great deal of know-how about how to build plants, meaning that there is a technical barrier for new entrants. This reality reinforces why Millennial is looking to use tried-and-tested technology that has been field proven over 50 years.

Key members of Millennial’s team have been in the lithium business for many years and have direct experience and contacts to take the company forward. On the exploration side, chief operating officer Iain Scarr worked on the commercial justification for the Jadar lithium-borate resource in Serbia for Rio Tinto. More recently he joined Lithium One and brought its Sal de Vida lithium brine project in Argentina through feasibility with Galaxy Resources and then completed the feasibility on the Rincon project with the Enirgi Group.

Scarr’s insights have helped the company hone in on the right part of the salar. While some explorers in Argentina apply the Atacama geological model—that is the basis of lithium production in neighbouring Chile—where the best brines are relatively shallow, Scarr found that at Pastos Grandes, the best brines are deeper. The magnesium content of the brine—the main impurity—is recorded as the magnesium/lithium ratio. It is 6.8 near the surface and less than 6.0 at 400m depth. “We found that the best brines are deeper. We find that the magnesium [the main impurity] decreases with depth,” he says.

This discovery has profound implications for brine processing as optimal process plant performance requires that it be set up to handle the exact brine chemistry. It is worth noting that the leading lithium producers Sociedad Química y Minera de Chile (SQM), Albemarle, FMC and Tianqi Lithium Industries are not miners but chemical companies focused on downstream products.

On the process side of things, Millennial has Dr Vijay Mehta on its advisory board. Dr Mehta has over 45 years’ experience in research and development and manufacturing of ore and brine-based technology for recovery of lithium and other salts to produce commercial-scale high-purity chemical products.

Dr Mehta’s presence means that the company has expert insight into lithium process technologies for the recovery of lithium brines into high-purity Li2CO3, LiOH and other products and meeting the specifications of lithium consumers.

As Millennial continues to advance, Harris sees the biggest challenge as maintaining the flow of capital the company will require to get into production, rather than permitting or technology, and he is encouraged by recent investments of downstream technology companies as strategic investors into the lithium supply space with future offtakes agreed at market prices. “We are in the best province – Salta – with a Salta-based team and we do not see any issues getting the permits we will need as we have great relationships with the provincial government. There are a lot of people looking for capital in the lithium space so you need to separate yourself from the masses.

“Lithium is relationship driven as it is not a traded commodity. Demand is greater than the current supply and recent financing deals have taken all Lithium Americas’ supply off the table so companies are scrambling to source the supply they will need in 2020 and beyond.

“It is rare that the big companies reach down to exploration companies but that is happening with Asian companies reaching out to us,” he says.