Global lithium resources are estimated to be 39 million metric tons (MT) and lithium is mined from three types of deposits: brines, pegmatites and sedimentary rocks. Continental brines and pegmatites (or hard-rock ore) are the main sources for commercial lithium production.
According to a recent University of Michigan study published in the Journal of Industrial Ecology, “[t]he feasibility of recovering lithium economically from any deposit depends on the size of the deposit, its lithium content (referred to as “grade” for ores and “concentration” for brines), the content of other elements, and the processes that are used to remove the lithium-bearing material from the deposit and extract lithium from it.”
Lithium-containing brine deposits
Generally, lithium extraction from brine sources has proven more economical than production from hard-rock ore. While hard-rock lithium production once dominated the market, the majority of lithium carbonate is now produced from continental brines in Latin America, primarily due to the lower cost of production.
There are three types of brine deposit — continental, geothermal and oil field — with the most common being continental saline desert basins (also known as salt lakes, salt flats or salars). They are located near tertiary or recent volcanoes and are made up of sand, minerals with brine and saline water with high concentrations of dissolved salts. A playa is a brine deposit whose surface is composed mostly of silts and clays; they have less salt than a salar.
Brine deposits represent about 66 percent of global lithium resources and are found mainly in the salt flats of Chile, Argentina, China and Tibet.
These are the most common form of lithium-containing brine. The majority of global lithium production comes from continental brines in what is known as the Lithium Triangle — a region of the Andes mountains that includes parts of Argentina, Chile and Bolivia.
The best example is the 3,000-square-kilometer Salar de Atacama in Chile, which contains an average lithium concentration of about 0.14 percent — the highest known — and estimated lithium resources of 6.3 million MT. Two of the world’s leading lithium producers, Sociedad Quimica y Minera (NYSE:SQM) and Rockwood Holdings (NYSE:ROC), operate on the Salar de Atacama. The Salar de Atacama produces more than half of the world’s total lithium.
Li3 Energy’s (OTCBB:LIEG) Maricunga project, located on the Salar de Maricunga in Northern Chile, is advancing to the feasibility stage and was recently named one of the world’s top lithium projects by industry research firm signumBox.
FMC (NYSE:FMC) produces lithium carbonate from another world-class lithium deposit, Argentina’s Salar del Hombre Muerto. Orocobre (ASX:ORE) is developing an operation on the neighboring Salar de Olaroz. In October 2012, the company entered into a joint venture agreement with Toyota Tsusho (TSE:8015) to develop the project. Initial battery-grade lithium carbonate production is expected to begin in April 2014.
Rodinia Lithium (TSXV:RM,OTCQX:RDNAF) is advancing toward production on its Diablillos property in Salta, Argentina and has a feasibility study underway. A recent NI 43-101 resource estimate shows an inferred brine resource of 4.9 million MT of lithium carbonate equivalent (LCE) in situ and 2.8 million MT of LCE recoverable. Rodinia’s Clayton Valley project in Nevada is near Rockwood Holdings’ Silver Peak lithium operation, which has a reported lithium concentration of 0.02 percent after 40 years of operation and an estimated lithium resource of 0.3 million MT.
Galaxy Resources’ (ASX:GXY) Sal de Vida project in Northwestern Argentina is in the final feasibility stage and has a NI 43-101 resource estimate of 4,053,000 MT of LCE and 16,071,000 MT of potash equivalent in the measured and indicated categories, plus an additional 3,180,000 MT of LCE and 12,762,000 MT of potash equivalent in the inferred category.
Bolivia is home to the world’s largest deposit of lithium, the Salar de Uyuni, which reportedly contains up to 50 to 70 percent of known world reserves. The odds of this continental brine seeing commercial production are low for several reasons, including: the fact that Bolivia is keen on keeping its natural resources under state control; the deposit’s higher magnesium to lithium ratios, which are three times as high as those at Atacama and make it more difficult and costly to refine the salt into lithium carbonate; and the fact that the evaporation rate at Uyuni is only 40 percent of that at Atacama, which means that refining would be more time-consuming.
Geothermal brines make up 3 percent of known global lithium resources and are comprised of a hot, concentrated saline solution that has circulated through crustal rocks in areas of extremely high heat flow and become enriched with elements such as lithium, boron and potassium. Small quantities of lithium are contained in brines at Wairakei, New Zealand, Reykanes Field in Iceland and El Tatio in Chile.
The Salton Sea in Southern California is the best-known example of a lithium-containing geothermal brine. Simbol Materials, a private California-based company, is producing high-purity lithium carbonate from discharge brine borrowed from geothermal plants operating on the Salton Sea. The company is using a unique reverse osmosis process that eliminates the need for solar evaporation, making operations more timely and cost effective. Simbol expects to increase production from 8,000 tons a year to 64,000 tons by 2020.
Lithium-enriched brines can also be found in some deep oil reservoirs, accounting for 3 percent of known global lithium resources.The Smackover Formation on the US Gulf Coast is believed to hold an estimated 0.75 million MT of lithium resource at an average concentration of about 0.015 percent. North Dakota, Wyoming, Oklahoma, Arkansas and East Texas are home to oil-field brines with concentrations as high as 700 mg/lt, according to geologist Keith Evans.
Pegmatite deposits or “hard-rock” deposits
Pegmatite is coarse-grained intrusive igneous rock formed from crystallized magma below the earth’s crust. It can contain extractable amounts of a number of elements, including lithium, tin, tantalum and niobium. This form of deposit accounts for 26 percent of known global lithium resources. Hard-rock ore containing lithium is extracted through open-pit or underground mines using conventional mining techniques. The ore is then processed and concentrated using a variety of methods prior to direct use or further processing into lithium compounds.
The process for extracting lithium from pegmatite or hard-rock ore is expensive, meaning that such deposits are at a disadvantage compared to brine deposits; however, lithium concentration in pegmatites is considerably higher than in brines, so deposits with extremely high lithium values may still be economically viable. The production of other resources, such as tin and tantalum, can help offset processing costs.
Lithium in pegmatites is most commonly found in the mineral spodumene, but also may be present in petalite, lepidolite, amblygonite and eucryptite.
Alaska, Northern Ontario, Quebec, Ireland and Finland are known to host pegmatite deposits. The largest producing spodumene pegmatite operation — located in Greenbushes, Australia — has an estimated resource of 560,000 tonnes of lithium in ore, with an average concentration of about 1.6 percent lithium. For now, the project is owned by Talison Lithium (TSX:TLH), but it is expected to come under the wing of Rockwood Holdings as part of a proposed all-shares takeover bid that may be finalized by late 2012 or early 2013.
Galaxy Resources’ James Bay project in Quebec, Canada is a lithium pegmatite (spodumene) deposit. The project is in the feasibility stage and has a NI 43-101 resource estimate showing indicated resources of 11.75 million MT grading 1.3 percent lithium oxide and inferred resources of 10.47 million MT grading 1.2 percent lithium oxide.
Canada Lithium (TSX:CLQ) is developing a “clean tech” open-pit lithium pegmatite (spodumene) mine and processing plant in La Corne Township near Val d’Or, Quebec. Commerical battery-grade lithium carbonate production is slated to begin in early 2013, reaching full production of 20,000 MT of lithium carbonate per year by the end of 2013.
Lithium-containing sedimentary rocks
Sedimentary rock deposits account for 8 percent of known global lithium resources and are found in clay deposits and lacustrine evaporites.
In clay deposits, lithium is found in the mineral smectite. The most common type of smectite is hectorite, which is rich in both magnesium and lithium. It gets its name from a deposit containing 0.7 percent lithium found in Hector, California.
Kings Valley, Nevada hosts another hectorite deposit with an estimated 48.1 million MT of indicated hectorite resources and 42.3 million MT of inferred resources grading 0.27 percent lithium. Western Lithium USA (TSXV:WLC) holds the deposit, which lies near the surface, where it can be mined by open-pit methods. The lithium will be extracted from the clay through a pyrometallurgical (roasting) method. In October 2012, the company submitted a Plan of Operations and Reclamation Permit Application to the Bureau of Land Management Winnemucca District Office and the Nevada Division of Environmental Protection. Both agencies have initiated a formal review. Approvals are expected in the first quarter of 2014.
In the Mexican state of Sonora, Bacanora Minerals (TSXV:BCN) holds a hectorite deposit with an estimated 43.3 million MT of inferred resources grading 0.30 percent lithium. The deposit lies near the surface where it can be mined by open-pit methods.
The most commonly-known form of lithium-containing lacustrine deposit is found in the Jadar Valley in Serbia for which the lithium- and boron-bearing element jadarite is named. The Jadar deposit, owned by mining giant Rio Tinto (NYSE:RIO,LSE:RIO,ASX:RIO), reportedly contains an inferred resource of 125.3 million MT of jadarite-bearing rock containing 1.8 percent oxide. The project is currently in the exploration stage, but the company believes the deposit “is one of the largest undeveloped lithium sources in the world, with the potential to supply more than 20 per cent of global lithium demand.”
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company or commodity mentioned in this article.