Puna Mining, in partnership with the Australian company Argosy, confirmed the suspension of operations at its currently productive but small-scale 2,000 tonnes per year (tpa) lithium carbonate plant in Salta province. This decision is intended to optimize economic resources for the development of a larger commercial plant with a capacity of 10,000 tpa, amid declining lithium prices. Just a week ago, they announced the shipment of 20 metric tons of lithium carbonate to South Korea. Now, they are entering a new development phase, anticipating a market rebound in the medium term.
By Panorama Minero
The decision is part of a broader strategy to focus on pre-development and engineering works for the 10,000 tpa project, aiming to bring it to a construction-ready stage. According to Argosy management, this reorientation will help mitigate project-related risks and better position the company to capitalize on the anticipated rebound in lithium demand.
The company has emphasized that its long-term vision remains to maximize shareholder value through the continuous development of the Rincon Lithium Project, with a production capacity that could reach 12,000 tpa, in line with regulatory approval granted by the Salta government.
Capital Preservation and Workforce Adjustment
To ensure prudent financial management and preserve available capital, the operators have decided to temporarily suspend commercial activities at their 2,000 tpa plant. "During this period, the company will undertake the necessary workforce restructuring to adapt to the requirements of the next phase of the project," they announced.
Despite the suspension, the 2,000 tpa facility will maintain its current infrastructure, allowing the company the option to resume operations if lithium prices show a sustained increase and operational conditions are suitable. "We made this decision because this strategic capacity to reactivate the plant provides a significant advantage in the lithium market," a sector currently experiencing high volatility.
Search for Strategic Partners
The decline in lithium prices and current market sentiment have led to greater scrutiny of investments in new production facilities. However, industry analysis suggests a structural deficit in lithium supply over the coming years. In this context, the owning companies have continued to receive interest from potential strategic partners, particularly from the battery and electric vehicle (EV) sectors.
They indicated that they continue to evaluate and review each opportunity, maintaining their commitment to the international investment bank and strengthening already established strategic relationships. "Several groups continue their due diligence processes on the Rincon Project, aiming to determine a preferred strategic partner and an appropriate investment structure."
Pre-Development Engineering Works
The pre-development engineering works for the 10,000 tpa project will be carried out in collaboration with a globally recognized engineering services company experienced in the lithium sector. These works will include capturing the intellectual property developed for the 2,000 tpa operation, value engineering of various project aspects, refining process design and detailed engineering, and hiring an EPCM (engineering, procurement, and construction management) service provider.
In a recent statement, Jerko Zuvela, Managing Director of Argosy, expressed: "The company is repositioning itself for sustained long-term success and to realize Argosy's ambition to fully develop the Rincon Lithium Project. We are very proud of the substantial progress made to date. We are aware of current lithium market conditions and are establishing the optimal strategic pathway to maximize shareholder value and become an international lithium carbonate producer."
