Argosy’s scaling up its Rincon lithium project as producers around the world start to sell out
Many lithium producers are now sold out of excess inventory until the end of 2021, as appetite downstream from the battery industry continues to surge.
And customer demand is increasing according to Argosy Minerals (ASX:AGY) managing director Jerko Zuvela, who told Stockhead the company’s seen increased interest in the product from its Rincon lithium project in Argentina from customers in Europe, North America, and Asia.
“It’s changed a lot the last six months from nine months ago, where prices were $5000-$6,000 a tonne to now where they’re $13,000-14,000,” he said.
“There’s a lot more interest and appetite to secure especially lithium chemical products because it’s actually getting harder to secure them.
“We’ve had a lot of calls and interest from potential customers, because they’re limited in what they can get – if they can get it at all.”
“In Europe and the US and eastern Asia, these battery factories have gotten funding, and these supply chains further down the line are getting funding to build Gigafactories and even cathode manufacturing, but we haven’t really seen the investment at the raw materials stage.
“Hopefully that’s still to come and will help us drive us forward to being able to realise our plan for our project.”
Funding could be the biggest barrier to lithium producers but since the market turned, things are looking up for Argosy.
The 2,000 tpa pilot plant at Rincon is just an interim step, according to Zuvela, with the company planning to scale up to 10,000 tpa operations.
“Over the last few years, we’ve been doing a lot of work refining the chemical process technology and ensuring that impurities are at acceptable levels for future potential customer requirements.
“But unfortunately, while we were doing that the lithium market has been pretty poor, so we shelved our plan to move straight to a 10,000 tpa operation because until late last year the funding just wasn’t available.”
Zuvela said that when the market turned late last year/early this year, the company was able to capitalise and raise the funds for this interim modular step with the 2000 per annum operation which is currently in construction.
“It’s currently in construction and we’re hoping to have that completed and commencing production operations before mid-year next year – but the plan is to scale up (subject to funding),” he said.
“We’re working to achieve the approval for an additional 10,000 tonnes per annum of product and hopefully we can get those approvals later this year and then the main thing is to secure the funding package to build another 10,000 tonnes per annum operation.”
Zuvela is hopeful that the next stage of building won’t stop at another 10,000 tpa capacity and that future interest in the sector will only increase.
Zuvela is confident that the outlook for Rincon is good, with countries around the world looking to secure their supply of the battery metal.
“We’re seeing the main Chinese companies really take a foothold in the industry securing these raw materials.
“And we’re seeing Europe, and North America and eastern Asia, Korea and Japan really take a step up over the last six months.
“The US government declared lithium and other minerals critical, and we’re seeing Europe’s green push to reduce carbon emissions – so all of us in the lithium game are very hopeful.”