Lake Resources to delay Argentinian Kachi Li project

Market: Battery materials, Metals
01/07/24

Australian lithium developer Lake Resources expects further delays to its Argentinian Kachi lithium brine project, and will no longer continue with agreements to sell its Kachi supply.

The firm's Kachi project previously faced a six-year delay that pushed its first phase production of 25,000 t/yr to 2027. The firm on 1 July said it now believes that this will "take longer than initially expected", citing macro environment conditions.

The firm is also now "managing an ongoing process" for the potential sale of its lithium assets in other parts of Argentina, namely its Paso de Jama, Olaroz, Cauchari and Ancasti assets, as it focuses on the Kachi project. Major Chinese lithium-ion battery cathode active material precursor manufacturer CNGR has been looking to invest and potentially acquire significant stakes in some Argentinian lithium projects, including Paso de Jama, a source from CNGR told Argus early last month.

Lake Resources will also cut more than 50pc of its global headcount to "right-size" its workforce and expenditure, on top of an earlier announcement in March about cutting 50pc of its "non-core operational and administrative" workforce.

The firm will also no longer progress the non-binding offtake agreements signed in 2022 to sell its Kachi output to South Korean battery producer SK On and Netherlands-based commodity trading firm WMC Energy. The firm will rather focus on "competitive strategic partnering process" for equity investment and offtake agreements.

Argus-assessed prices for 99.5pc grade lithium carbonate stood at 90,000-95,000 yuan/t ($12,382-13,070/t) ex-works China on 28 June, with recent bearish sentiment in the lithium market. Woes are also mounting for the downstream battery and electric vehicle industry.

By Joseph Ho

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