Posco Argentinian Lithium Projects Delayed Amid Prolonged Price Slump

Argentinian Lithium Projects

South Korea’s Posco has delayed completion of its Argentinian lithium projects by six months, citing sluggish lithium price recovery. The Posco Argentinian lithium projects were originally set to complete Phase 2 by Q3 2025 but are now rescheduled for Q1 2026.

Phase 2 Pushed Back as Market Conditions Weaken

Posco began operating its 25,000 t/yr lithium hydroxide plant in Argentina last year. The planned Phase 2 would have doubled capacity to 50,000 t/yr through a connected upstream brine project. However, weak lithium prices and soft global demand forced a schedule revision. The company now aims to optimize production systems and ramp up Phase 1 by late 2025.

This move reflects Posco’s strategic adjustment amid a volatile market. In its April 24 report, Posco highlighted the need for operational flexibility in response to sustained pricing pressures.

Lithium Price Pressure Forces Broader Strategic Realignment

The lithium downturn also contributed to Posco ending its nickel refinery joint venture with China’s CNGR. The JV’s liquidation will complete by June, marking a retreat from previously planned upstream battery material partnerships.

Meanwhile, Posco Future M—Posco's battery materials subsidiary—posted quarterly revenue growth of 17% but a 26% decline year-on-year. Profitability rebounded modestly, helped by rising sales of high-nickel cathode active material (CAM) and growing demand for non-Chinese anode active material (AAM).

China Price Slide Highlights Global Supply Chain Fragility

Chinese lithium carbonate prices remain under pressure due to weakened demand and US-China trade tensions. As of 22 April, lithium carbonate prices dropped to ¥69,000–72,000/t ($9,463–9,874/t), extending a multi-week decline. This pricing environment complicates investment timelines and return expectations for global lithium projects.

The Metalnomist Commentary

Posco’s delay reflects broader capital discipline across the lithium sector amid persistent price volatility. With Phase 2 postponed, the company is signaling caution, while still committing to its long-term battery supply chain strategy in South America.

Japan Eyes Investments in Argentinian Lithium as Demand for Battery Metals Grows

Argentina lithium

Salta Province Attracts Japanese Interest Through RIGI and Strategic Bilateral Proposals

Japan eyes investments in Argentinian lithium to secure long-term access to key battery metals amid global electrification efforts. Japanese government officials recently met with authorities from Argentina’s Salta province to assess the region’s lithium reserves and explore opportunities for partnership. The talks focused on Salta’s lithium potential and included inquiries into major mining projects across multiple commodities—signaling broader strategic interest in Argentina’s resource sector.

While lithium was the main focus, Japanese officials also discussed First Quantum’s Taca Taca copper project, the Lindero gold mine operated by the UK’s Mansfield, and silver exploration by Abrasilver and Anglogold. Japan’s delegation reportedly requested support for a bilateral investment grant, which, alongside Argentina’s Régimen de Incentivo para Grandes Inversiones (RIGI), could fast-track Japanese capital into the province’s mining sector.

Argentina’s Investment Incentives Align with Japan’s Supply Chain Strategy

The RIGI framework offers approved projects reduced tax burdens, lower royalties, simplified customs procedures, and accounting flexibility. These benefits are designed to attract large-scale foreign investment into Argentina’s high-potential mining regions. As Japan eyes investments in Argentinian lithium, RIGI could serve as a key enabler for Japanese companies seeking stable, long-term access to battery-grade lithium and related critical minerals.

The visit underscores Japan’s strategy to diversify supply chains away from China, especially for electric vehicle and energy storage technologies. By tapping into Argentina’s lithium triangle, Japan can enhance its resource security while supporting Latin America’s role in the global clean energy transition.

The Metalnomist Commentary

Japan’s proactive engagement in Argentina’s Salta province reflects a targeted push to secure non-Chinese lithium supply. As battery metal demand accelerates, bilateral frameworks like RIGI and diplomatic investment channels will shape the next wave of global critical minerals partnerships.

EnergyX Targets Argentinian Lithium Assets of Galan Lithium Amid Industry Downturn

US energy technology firm EnergyX has set its sights on acquiring Australian developer Galan Lithium’s assets in Argentina, a strategic move aimed at boosting lithium production despite current market challenges.

EnergyX has proposed a deal valued at $150 million, which includes $50 million in cash and $50 million worth of EnergyX shares, to purchase Galan’s lithium assets located in Salar del Hombre Muerto and Candelas. Additionally, EnergyX plans to inject another $50 million into its wholly-owned subsidiary, which will manage the assets. This funding will be allocated to complete the first commercial phase of lithium production at the Hombre Muerto West (HMW) project. Under the proposed agreement, Galan will receive 10% of gross revenue royalties for ten years following the commencement of commercial production.

The acquisition comes at a crucial time as Galan Lithium recently delayed the first production at its HMW project to the second half of 2025, attributing the delay to the current downturn in lithium prices. The HMW project’s initial phase is expected to produce 5,400 tons per year of lithium carbonate equivalent (LCE), with a long-term goal of reaching 60,000 tons per year in its final phase. The Candelas project is expected to be integrated into this production timeline.

EnergyX plans to leverage its direct lithium extraction (DLE) technology, which is significantly more complex than traditional methods but promises higher efficiency. DLE can potentially increase lithium recovery rates to 70-90%, compared to the traditional methods' 40-60% recovery rate from hard rock mining and solar evaporation. This innovative approach could significantly enhance the value of the Argentinian assets beyond Galan's current projections, which rely on evaporation pond methodologies.

The lithium industry has seen increasing interest in DLE technology from various sectors, including oil and gas companies. Firms like CleanTech Lithium, Equinor, and ExxonMobil are already investing in lithium projects that employ DLE, reflecting a broader industry shift towards more efficient and sustainable extraction methods.

Lithium Chile Sells 80% Stake in Arizaro Lithium Project for $180 Million

Arizaro

Lithium Chile, a Canada-based lithium mining company, has agreed to sell its 80% stake in the Arizaro lithium project in Argentina for $180 million. The deal, announced on Thursday, involves a binding letter of intent with a large Asian company operating in mining, renewable energy, and technology sectors. However, Lithium Chile has not disclosed the buyer’s identity.

The Arizaro lithium project, located in Salta province, is a key lithium asset with an estimated 4.12 million metric tonnes (mt) of lithium carbonate equivalent (LCE) and a projected 20-year mine life, according to Lithium Chile's official reports.

Regulatory Approvals Pending

The sale is still subject to government and regulatory approvals, which must be finalized before the transaction is completed. The project is managed through Geo Inversiones Mineras, Lithium Chile’s Argentinian subsidiary.

Lithium Chile operates 11 properties covering over 100,000 hectares (ha) in Chile and approximately 30,000 ha in Argentina, positioning it as a major player in South America’s lithium market.

Strategic Position in the Lithium Triangle

The Arizaro salt flat is part of Argentina’s growing lithium industry, which is crucial to the "lithium triangle", a region comprising Argentina, Bolivia, and Chile that holds approximately 60% of the world’s lithium resources.

The sale of this key lithium asset underscores increasing Asian investment in South America's lithium sector, as demand for battery metals continues to rise in response to global EV market growth.

Galan Lithium Secures Permit for Phase 2 Expansion at Hombre Muerto West Project

Hombre Muerto West

Galan Lithium has received a significant boost for its Hombre Muerto West (HMW) project in Catamarca, Argentina, with the granting of a Phase 2 mining permit by the Argentinian Ministry for Mining. This approval paves the way for a substantial increase in lithium production capacity at the brine project.

Production Expansion and Strategic Advantages

The Phase 2 permit allows Galan Lithium to ramp up nameplate capacity at HMW to 21,000 tonnes per year, a significant expansion from its Phase 1 production.  "We are delighted with the grant of the Phase 2 mining permit," said Juan Pablo Vargas de la Vega, Galan's managing director. "It will allow Galan to increase production over threefold from Phase 1 and produce a premium-quality lithium chloride product, which is in high demand. Importantly, HMW is positioned in the first quartile of the cost curve, and Phase 2 production would be cash-flow positive even at today's prevailing lithium carbonate prices."

The company currently holds an inventory of approximately 6,000 tonnes of lithium contained in existing lithium ponds at HMW and aims to commence Phase 2 ramp-up this year. This strategic timing positions Galan to capitalize on the anticipated recovery of lithium prices.

Future Growth and Resource Potential

Galan Lithium has ambitious plans for further expansion at HMW, with two additional phases in the pipeline. Phase 3 aims to achieve a production capacity of 40,000 tonnes per year within a two- to five-year timeframe, while Phase 4 has a longer-term target of 60,000 tonnes per year.  The project boasts substantial reserves of 7.3 million tonnes of lithium carbonate equivalent (LCE) at a high grade of 852 mg/L of lithium, representing the highest-grade and lowest-impurity lithium brine resource in Argentina.

Navigating Market Dynamics

This expansion comes at a time when lithium carbonate prices have experienced a significant correction, falling to $9.10-9.40/kg cif China on December 31st, down from $13-14/kg at the start of 2024.  Prices have plummeted by 86% since their 2022 peak, prompting several hard rock lithium producers in Africa and Australia to curtail production and conserve resources.  However, brine producers like Galan, with their larger scale and lower operating costs, are better positioned to weather the price downturn and benefit from sustained demand from lithium-iron-phosphate (LFP) battery manufacturers.