In Argentina mining talent trails lithium demand

There is a huge demand globally for lithium, from electric vehicles to portable power-banks. A great example of this would be Tesla. It seems as though Tesla decided to skip the bulk of products, going with completely opposite ends of the spectrum, the well known Tesla electric vehicles and now the not so widespread Tesla phone charger. Both of witch use the exact same batteries just one has a lot more of them!

Lithium Americas (TSE: LAC)( has been doing great in Chile lately and now seems to have its eyes set on expanding in Argentina. But do to the lack of local expertise might cause some slow downs. Read on to get more finite details on the current developments:

In the global rush to supply the electric-car revolution, lithium hot spot Argentina is grappling with a shortage of talent. Battery makers are depending on the South American country’s high-altitude salt flats as a key new supply of the metal, with vast deposits and an investor-friendly government luring prospectors and developers. Under President Mauricio Macri, Argentina has ambitions to become a lithium superpower, supplying as much as 45 per cent of the market, up from about 16 per cent currently.

Projects have faced unpredictable weather and financing struggles. But perhaps the biggest barrier to development is a dearth of skilled workers.

“In Argentina, everyone wants to be a lawyer or a doctor,” said Miguel Angel Persoglia, who has worked on copper and silver projects and now heads the pilot operations at Minera Exar SA, a joint venture between Lithium Americas Corp. and Soc. Quimica & Minera de Chile SA. “There’s no technical personnel” for lithium.

The shortage of local expertise can be seen as a growing pain in a new industry, and one that’s being exacerbated by competition from other sectors, such as shale gas, as deregulation under Mr. Macri helps jump-start the economy.

Up until two years ago, the only company extracting lithium on a commercial scale from Argentine brine was U.S.-based FMC Corp., which began operations in the Dead Man salt flat in 1997. Australia’s Orocobre Ltd. became the country’s second producer in 2015.

The SQM-Lithium Americas venture on the CauchariOlaroz salt flats, about 4,000 metres above sea level in Jujuy province, plans to start producing lithium carbonate at an annual rate of 25,000 metric tons in 2019. Dozens of other projects are at earlier stages.

Extracting lithium from salty water is cheaper and easier than hard-rock mining. Producers drill for brine, then pump the liquid through giant hoses into turquoise evaporation ponds. What’s left is processed into lithium carbonate, prices of which have tripled in the past three years.

But companies including Orocobre have found the process is trickier than they first expected. The Brisbane, Australia-based company, which operates at CauchariOlaroz in partnership with Toyota Tsusho Corp., has cited a lack of engineering expertise as contributing to its failure to hit a production target of more than 15,000 tons for the year through June. With cloudy weather also hindering evaporation and snow storms delaying arrivals of a key imported chemical, output was about 11,900 tons.

“You can’t generate the know-how just like that,” said Cristian Saavedra Lopez, a Chilean who heads Orocobre’s lithium operations in Argentina. The company has been working for about two years with the National University of Jujuy to train both current employees and students who could apply for jobs at the mine, Mr. Saavedra Lopez said.

The university, with the support of Conicet, Argentina’s science and technology promotion agency, has set up a research centre for improving extraction techniques and developing high-performance rechargeable batteries made with lithium. Notably, the centre hired Victoria Flexer, a prominent Argentine chemist who was tempted home after years overseas.

Argentina’s lithium industry will employ 1,538 people by 2019, up from 1,178 currently, according to mining chamber Caem.

A lithium-carbonate mine with a capacity of 20,000 tons a year needs an operational staff of about 200, according to Argentina’s Energy and Mining Ministry. With 38 projects in the country’s lithium pipeline, including Minera Exar, that could mean an arduous headhunt to ensure 7,600 jobs of varying technical levels get filled.

In the race to satisfy the world’s lithium appetite, which is set to more than double by 2025, driven by the electric-vehicle boom, Lithium Americas expedited the talent search.

To equip its Minera Exar venture with expertise, the company brought SQM on board in March, 2016, giving up a 50-per-cent equity stake. The partnership also ensured a $285-million (U.S.) investment from China’s Jiangxi Ganfeng Lithium Co. and Thailand’s Bangchak Corp. at a time when it’s proving tough to get financing for Argentine lithium projects.

SQM already produces lithium carbonate at a much bigger mine on the Atacama salt flat over the border in Chile. It has sent 60 seasoned engineers to Minera Exar, according to Lithium Americas. “It’s an arms race for engineers,” said John Kanellitsas, Lithium Americas’ president, comparing the talent squeeze to the shortage of specialist programmers in Silicon Valley. The problem, according to Mr. Kanellitsas, is that generic mining experience is insufficient. “This is not copper or gold,” he said. “Every lithium project is a bespoke chemical plant.”

**News Provided by The Globe and Mail 29 Dec 2017JONATHAN GILBERT



** We are currently long TSE:LAC but as always the opinions stated are that just opinions, you make and are responsible for your choices and investments, good luck!

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