Lithium Argentina has published a scoping study for a second stage at its Cauchari-Olaroz project that would more than double output to about 85,000 tonnes a year. It plans to fast-track a first 10,000-tonne phase using direct extraction technology.
At a glance
- Stage 2 would add 45,000 tonnes a year of lithium carbonate, lifting total capacity from 40,000 to about 85,000 tonnes.
- The study puts the after-tax net present value at $3.1 billion and the internal rate of return at 28.5%, assuming lithium carbonate at $18,000 a tonne.
- A first 10,000-tonne phase using direct lithium extraction is targeted to come online in 2028.
Background
Cauchari-Olaroz is a lithium brine operation in northern Argentina, run by Lithium Argentina with China's Ganfeng. A scoping study is an early-stage estimate of a project's costs and returns, less detailed than a feasibility study. Direct lithium extraction (DLE) pulls lithium from brine in a plant rather than in large evaporation ponds.
What happened
Lithium Argentina has released scoping study results for Stage 2 at Cauchari-Olaroz. The brownfield expansion would add 45,000 tonnes a year of lithium carbonate equivalent, taking total capacity from 40,000 tonnes to about 85,000 tonnes, with an expected 40-year life.
At a lithium carbonate price of $18,000 a tonne, the study estimates an after-tax net present value of $3.1 billion and an internal rate of return of 28.5%. It puts capital costs at about $1 billion, operating costs at $5,006 a tonne, and payback at about five years.
The faster first step
Rather than build everything at once, the company plans to accelerate an initial 10,000 tonnes a year of Stage 2 using adsorption-based direct lithium extraction. It is targeting 2028 for that phase, subject to permits and regulatory approvals in Argentina and China.
Chief executive Sam Pigott described a "flexible, modular strategy to Stage 2 development". He called the 10,000-tonne phase "the fastest and most capital-efficient path to incremental production". Lithium Argentina runs Cauchari-Olaroz with China's Ganfeng Lithium.
What it means
Stage 2 has also been approved under Argentina's RIGI regime, which offers fiscal benefits and faster depreciation to large investments. That improves the project's economics before financing talks begin.
The project is still at an early stage. The next steps are early works, detailed engineering, environmental permitting and project financing, so the full 45,000 tonnes is years away. Scoping studies are also less precise than feasibility studies, so the cost and return estimates may change as work advances.
Our read
Outlook: neutral. The expansion would add meaningful supply, but not before 2028 at the earliest. Its effect on prices depends on whether it is financed and built.
What to watch
- Permits and approvals for the 10,000-tonne DLE phase in Argentina and China.
- Project financing for Stage 2.
- Lithium carbonate prices compared with the study's $18,000 a tonne assumption.
For information only, not investment advice.
Lithium price in India
metalscost.com India reference price as of 2026-10-03.
Detailed analysis
Timeline
- 2026-09-30: Lithium Argentina publishes the Cauchari-Olaroz Stage 2 scoping study.
Supply Drivers
Stage 2 would add 45,000 tonnes a year of lithium carbonate, more than doubling the project.
Government Policies
Approval under Argentina's RIGI regime gives Stage 2 fiscal benefits and accelerated depreciation.
What could lift prices
- Expansion is years away, so it does not add supply in the near term.
- Projects like this need lithium prices near the study's $18,000 assumption to be financed.
What could weigh on prices
- Another 45,000 tonnes a year would add meaningful supply later this decade.
- Low operating costs of $5,006 a tonne would keep the project competitive even at lower prices.
Country impact
| Country | Impact | Reason |
|---|---|---|
| Argentina | Medium | The expansion would add a large lithium investment backed by the RIGI incentive regime. |
| China | Low | Partner Ganfeng is Chinese, and the DLE phase needs approvals there. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Critical Minerals Mining | Positive | A low-cost brownfield expansion strengthens Argentina's lithium pipeline. |
| Battery Manufacturing | Positive | Battery makers gain a potential source of extra lithium carbonate from 2028. |
Who gains, who loses
- Lithium Argentina shareholders: The study points to a $3.1 billion after-tax value for the expansion.
- Higher-cost lithium producers: New low-cost supply would compete with them later this decade.
Other ways this could play out
- If permits come quickly, the first 10,000 tonnes could arrive in 2028 as planned.
- If lithium prices stay below the study's assumption, financing could be delayed.
Price risks
- Scoping studies carry wide uncertainty on costs and timelines.
- Lithium prices fell sharply from their May peak this year, which could slow financing.
Technical view
Price is trading below both its 20-period and 50-period moving averages, a bearish alignment.
Computed from metalscost.com's own stored price history.
Argentina
China