From Exploration to Production: The Phases of a Brine Lithium Project

A long and capital-intensive road

A brine lithium project is not born in production: it goes through a lengthy life cycle in which each stage reduces geological and technical uncertainty but also increases financial exposure. Unlike hard-rock mining, brine projects in the Puna rely on evaporation-based concentration processes and on the particular chemistry of each salt flat, which makes the early validation of variables such as the magnesium/lithium ratio, aquifer porosity and subsurface permeability critical.

In general terms, the period between the first prospecting campaigns and the first tonne of lithium carbonate equivalent (LCE) produced is around seven to ten years, with cumulative investments that can range between 400 and 800 million dollars depending on scale. Understanding this sequence is essential for investors and officials who assess timelines, risks and returns.

Prospecting and early exploration

The prospecting stage seeks to identify salt flats with potential. It combines satellite imagery, surface geophysics and brine sampling to estimate lithium concentrations, which in the high-quality salt flats of the Puna typically range between 300 and 900 mg/l. This phase is relatively inexpensive —in the order of a few million dollars— but highly uncertain: most explored areas never become projects.

Advanced exploration incorporates drilling, pumping tests and pilot-scale evaporation trials. It is here that the aquifer's behaviour and the viability of the process begin to be understood. The investment scales up to tens of millions of dollars and the time horizon spans two to four years, depending on high-altitude logistics and the availability of equipment in remote regions.

Resources versus reserves: a key distinction

A frequent mistake when reading projects is confusing resources with reserves. Mineral resources —classified as inferred, indicated or measured according to geological confidence— represent the estimated amount of lithium contained in the salt flat. Not all of those resources are economically extractable.

Reserves, on the other hand, are the portion of resources whose exploitation is technically and economically viable under defined assumptions of price, costs and metallurgical recovery. International standards such as JORC or NI 43-101 regulate this classification. For an investor, the conversion of resources into reserves is the most concrete sign that a project is maturing towards its production phase.

Economic studies: from PEA to feasibility

Technical maturation is formalized through engineering studies of increasing precision. The first is usually a Preliminary Economic Assessment (PEA), which offers a conceptual view with wide margins of error. It is followed by the Pre-Feasibility Study (PFS) and, finally, the Feasibility Study (DFS or BFS), which reduces the uncertainty of capital estimates to a range close to ±15%.

The DFS defines the design of evaporation ponds, the processing plant, the brine pumping rate and the construction schedule. It is the document on which the final investment decision (FID) is made and the financing is structured. Reaching this stage can take an additional two to three years and an investment that adds to the project's cumulative curve.

Construction and start-up

Once the FID is approved, the construction phase begins, which in brines is particularly extensive due to the dynamics of evaporation: ponds require a filling and concentration period that can take twelve to eighteen months before feeding the plant. The construction of infrastructure —roads, water intake, power, camps and the chemical plant itself— concentrates most of the CAPEX, which for a project of 20,000 to 40,000 tonnes of LCE per year can exceed 500 million dollars.

The ramp-up, or production increase curve, is the final and often most underestimated phase. Taking a plant from its first tonne to nominal capacity can take between one and three years, as the evaporation and precipitation processes must be adjusted to the real conditions of the salt flat. The difference between projected and actual performance during ramp-up is often decisive for the project's profitability.

The Argentine Puna: advantages and challenges of the cycle

Argentina, the world's fifth-largest lithium producer, concentrates its potential in the Puna of Jujuy, Salta and Catamarca, where brines stand out for operating costs that are competitive in the global context. However, altitude, distance from infrastructure and water availability extend timelines and raise capital compared with other jurisdictions.

In this scenario, instruments such as the RIGI, in force since 2024, seek to improve fiscal and exchange-rate predictability for long-term investments, a decisive factor when the return on capital only arrives after nearly a decade of outlays. For those assessing projects in the region, understanding the full cycle —and not just the promise of the reserves— is the foundation of an informed decision.