While Canada-based Plateau Energy Metals’ Macusani uranium project near Puno is undergoing preliminary economic assessments, its lithium reserves, which were discovered unexpectedly in November 2017, are giving rise to interest in an area that could see Peru become a major player in the global lithium boom. Plateau Energy Metals began as a uranium exploration company and has grown its resources to more than 900 sq km over the last decade, but it was the lithium discovery that drove the company to increase its investment at the site from $300m to $800m. According to a report published by the company, its Falchani project was estimated to have 2.4m tonnes of contained lithium carbonate equivalent in July 2018; however, in March 2019 the figure was revised to 4.7m tonnes, approximately 90% higher than the initial estimate.

Unlike the brine projects that have made Chile, Argentina and Bolivia hubs of lithium mining, the Falchani site is a hard rock resource, the sixth-largest of its type in the world. According to Alex Holmes, CEO of Plateau Energy Metals, the grade of lithium at Falchani is five to 10 times higher than those found at brine sites.

Global Demand

In an article published in July 2018 Luis Rivera, executive vice-president of the Americas at South African-headquartered Gold Fields, and president of the Peruvian Institute of Mining Engineers, called lithium “the metal of the future”. He also stated that Peru “should not waste this great opportunity and should encourage private investment”.

Growing demand for rechargeable batteries is driving worldwide lithium consumption, which increased by 20% in 2018 to reach 47,600 tonnes of lithium content, according to the US Geological Survey (USGS). The USGS places worldwide lithium production capacity at around 91,000 tonnes per year and estimates that batteries account for approximately 56% of the market.

At 8m tonnes Chile has the most lithium resources by far, although Australia is the world’s biggest producer thanks to its Mount Marion and Mount Cattlin mines. In 2018 Australia produced 51,000 tonnes of lithium compared to Chile’s 16,000 tonnes.

A Sign of Encouragement

Plateau Energy Metals’ discoveries have been encouraging other industry players to carry out exploration activities. In February 2018 fellow Canadian firm Azincourt Energy signed a letter of intent to acquire the Macusani-Cuzco lithium and uranium project from Peruvian firm Guevan Petroleum. Later that year reconnaissance surveys on the project, which comprises three concessions covering a combined area of 7400 ha, identified two new prospective uranium areas measuring a total length of 6.5 km. Test results showed up to 8061 parts per million of uranium on certain rock samples.

Legal Matters

One particularity about Plateau Energy Metals’ discovery is that the lithium was found underneath deposits of uranium, a radioactive element used to fuel nuclear reactors. Though uranium can be mined and processed under Peru’s General Mining Law, it requires a separate legal framework to oversee transportation and extraction. As of February 2019 the legislation was being processed by the government, and a preliminary economic assessment is expected to be completed by the end of June 2019.

Without the uranium legislation, concerns were raised over Plateau Energy Metals not being able to mine lithium until it could get through the uranium. However, according to Holmes, though the initial discovery of lithium was underneath uranium, on most parts of the site there is no uranium found at the surface. “Given the scale of the [lithium] deposit, there is no need to move overburden material from any of the small area where uranium exists for many, many years, if at all,” Holmes said in an April 2019 press release.

Spying an opportunity in a growing industry, the government’s public statements about lithium have been encouraging. Walter Sánchez, director of mining promotion at the Ministry of Mines and Energy, told OBG that the ministry “sees lithium extraction favourably”.