INTERVIEW: Bolivia’s YLB targets spot, international markets for lithium

By Martim Facada
Published: Thursday, 05 April 2018

Amid recent price increases, Bolivian lithium producer YLB has set its sights on international markets as it hurries to ramp up production. Industrial Minerals market reporter Martim Facada hears how the company and the state plan to harness the country’s vast resources.

 YLB ponds, lithium, March 2018
 YLB operations in Llipillipi at the Salar de Uyuni (Source: YLB)

The 200% rise in lithium prices over the past two years has prompted Yacimientos de Litio Bolivianos (YLB) to accelerate its production timetable, general manager Juan Carlos Montenegro told Industrial Minerals in an interview in Bolivia in early March.

YLB has brought forward its targeted start date for production of battery-grade lithium carbonate to the end of 2019, from its earlier target of 2020. It will ramp up production to about 15,000-18,000 tonnes per year in 2020.

While the company has to date only started production at its pilot plant, YLB has already reported strong demand from potential consumers.

"There are several companies trying to book all our lithium pilot production, or to lock in multi-year contracts for all our production once we start producing. But for now we will keep with our spot sales and sell material to the international market, due to the strong demand and historically high prices," Montenegro said.

To date, YLB has only achieved production of 300 tpy of lithium carbonate (Li2CO3), technical and industrial grade, min 98.5-99.2%, from its pilot plant in Llipillipi in the Salar de Uyuni.

With the lithium industry seeking a benchmark market to track prices, YLB is keeping a close eye on prices in China, the world’s largest lithium consumer.

"Our lithium carbonate price reference is the Chinese lithium carbonate battery-grade market domestic price," Montenegro told Industrial Minerals.

The Chinese domestic spot price for lithium carbonate min 99.5% battery grade was 150,000-155,000 yuan per tonne ($23.70-24.50 per kg) on March 22, according to Industrial Minerals’ latest assessment. Although this was down from the record high of $27 per kg in June 2016, prices remain historically high compared with average levels of $7.70 per kg in October 2015.

Contract business for battery-grade lithium carbonate, cif China, Japan & South Korea, averaged $18.50 per kg in February, according to Industrial Minerals’ monthly market assessment, compared with an average of $15.50 per kg in October.

"There is a great demand for our lithium carbonate from China, Europe and the United States. The latest bid we received [in early March] in the spot market was $21.60 per kg ex-works Bolivia, for 20 tonnes of our lithium carbonate, min 99-99.2%, technical and industrial grade," Montenegro told Industrial Minerals.

YLB sold 67 tonnes of lithium carbonate, min 98.5-99%, technical and industrial grade, in 2017 but expects to sell 20-25 tonnes per month of lithium carbonate, min 99-99.2%, technical and industrial grade, in 2018 in the spot market.

Even if prices retreat further from the highs of the past two years, YLB would be able to produce material profitably, it asserts.

"In the case of lithium world market prices moving down to $7 per kg, we would keep producing, because we estimate a production cost of $3-4 per kg once fully operational," Montenegro added.

YLB currently exports its lithium carbonate via Chile, but Montenegro told Industrial Minerals that the planned Bioceanic railway, which will link the west and east coasts of South America, could open up other exporting routes to destinations such as Peru and Brazil.

The road to production

Lithium production from Bolivia is not a new concept, however. The Bolivian national strategy to industrialize the lithium resources and related products, and in particular at the Salar de Uyuni, started in 2008.

A lack of experience or willingness to open up the country’s resources to foreign companies has been said to be the principal block to progress.

But Bolivia is now closer than ever to becoming a serious lithium producer, Montenegro told Industrial Minerals, adding that the state is playing an active role in the process.

"YLB is moving at a steady pace toward our production target of around 43,000-45,000 tpy of lithium carbonate equivalent [LCE] and to make Bolivia a relevant participant in the world lithium market," he added.

The first and second stages of development of YLB’s project will be funded by the state only, while the third stage will see an external partner brought in.

"Our industrial-scale lithium carbonate battery-grade plant is [expected to produce around] 15,000-18,000 tpy, and we are now looking to choose from two external companies to build the plant," Montenegro told Industrial Minerals.

China’s Beijing Maison Engineering and Germany’s AFK ACI Group are vying to win the contract to build the industrial scale lithium carbonate plant, which will be run by Bolivians because the country is determined to upskill its people.

"Once the plant is built, it will be operated by Bolivian workers only, and will be ready to produce battery-grade lithium carbonate," Montenegro added.

 YLB Carbonate, March 2018
   YLB lithium carbonate bags (Source: Industrial Minerals)

The third phase of the YLB project will comprise the production of Li-ion batteries and cathode materials at the two battery and cathode pilot plants at La Palca in Bolivia.

The construction of a lithium hydroxide battery plant through an external partner is also being planned. This partner would take a 49% share of ownership while the state would retain a 51% controlling share, YLB explained.

"YLB is currently looking for a partner to build a lithium hydroxide production plant with a production capacity of 25,000 tpy in the Salar de Uyuni, in exchange for the lithium carbonate residual brine resulting from the lithium carbonate evaporation process at YLB operations," Montenegro told Industrial Minerals.

This partner would require cutting-edge technology, and must be willing to share this technology with YLB and to help sell the lithium and battery compounds internationally in Europe or Asia, he added.

Operations at the Salar de Uyuni

YLB has six lines of brine ponds in operation, each line with eight ponds, in Llipillipi in the Salar de Uyuni. It intends to expand this in 2018 to 12 lines of eight brine ponds each.

"We have 96 brine ponds already built in Uyuni, but we are working on sealing the brine ponds to prevent brine leaks, to install the tube networks and pumps, to finish some wells and to extend electrification to all the network," Montenegro told Industrial Minerals.

As it moves toward large-scale lithium production, Uyuni faces a number of challenges, geological and meteorological, which impede it despite its great size. For comparison, when set against the lithium producing salars in the other two countries of Latin America’s so-called "Lithium Triangle", it is more than three times the size of the Salar de Atacama in Chile and almost 20 times the size of Argentina’s Salar del Hombre Muerto.

One known challenge is that the magnesium-to-lithium ratio in the brines extracted from the Salar de Uyuni is high when compared with brines from other salars. Buyers look for very low-to-zero magnesium content in lithium carbonate used in batteries, because the process of separating out the magnesium is difficult and costly.

The engineers operating the pilot plant in the Salar de Uyuni have been working on getting the best out of the entire production process, and reducing the magnesium content at the lowest cost possible, an engineer at the pilot plant told Industrial Minerals on a site visit in March.

*Battery grade lithium carbonate and hydroxide prices are available in full in Industrial Minerals’ weekly Battery Price Report.