As Tesla’s battery business concentrate on Argentina’s lithium, Canadian lithium juniors, such as Lithium Americas Corp, might see renewed investor interest. American electric carmaker Tesla recently paid a visit to Argentina’s lithium-rich Salta province to talk to government officials about investing in renewable energy in the region and sourcing the white metal to power its ambitious production targets.
Tesla aims to manufacture 500,000 electric vehicles a year by 2018, with its hotly anticipated Model 3 electric sedan accounting for bulk of the production volume.
The Palo Alto headquartered company is also expanding its solar-storage business by developing microgrids across cities. Solar technology essentially runs on lithium-ion batteries and Tesla is building huge battery plants called Gigafactories to mass-produce them.
Its Gigafactory 1 in Nevada, United States is already in production with a target to produce 35 GwH/year of lithium-ion battery cells by 2018, which Tesla claims is nearly as much as the rest of the world’s battery production combined. And it is planning 3 to 4 more gigafactories at other locations. Earlier this year, the Company stated that it is “partnering with major mining companies and working with promising juniors to ensure future supply” of lithium.
While Tesla is already in supply arrangements in Chile, the sudden interest in Argentina seems to be largely due to the many business reforms introduced by the new government of President Mauricio Macri. The 5 percent mineral import tax has been scrapped, currency and capital controls are out and mining infrastructure is set to be revamped. Of course it helps that Argentina is the world’s third-largest producer of lithium and that together with Chile and Bolivia, it makes up the so-called ‘lithium triangle’.
As Tesla attempts to make what it calls, “the biggest possible impact on transitioning the world to sustainable energy,” it has sparked a rush among companies who are turning into lithium explorers overnight.
Tesla is eyeing Argentina. Many have already invested in lithium assets in the country and are trying to find financing for the projects they have launched. The ones who can get to production stage first will perhaps distinguish themselves from the other lithium juniors. Let’s take a look at some of the promising Canadian bets.
Lithium Americas is developing the Cauchari-Olaroz lithium brine deposit in Argentina in a 50/50 joint venture with Chilean giant SQM, which is the world’s largest producer of lithium. SQM’s technical expertise and well-established local network, adds a definite competitive advantage to the JV.
The project is well connected to running infrastructure and it has already tied-up funds to the tune of 286 million dollar. The project is also getting the green light from all corners. In March, it not only received the all clear from the provincial government to start construction and operations but it also released a positive feasibility study for Stage 1 of the Project. It expects to kick-start construction during the first half of 2017 and production is expected to start in 2019.
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