Buenos Aires — In the midst of the lithium development boom in Argentina, alarm bells rang Thursday when it was revealed that one of the world’s leading mining companies, Rio Tinto (RIO), is reviewing the costs of the lithium processing plant it is building in the province of Salta, and which implies investment of $140 million.
However, the company clarified that this does not mean a revision of the project itself.
In the company’s second quarter 2023 sustainability report sent to investors, a sentence warns that “at our Rincón lithium project in Argentina, our $140 million estimate and the schedule for developing the start-up plant remain under review in response to a cost escalation.”
However, the same document clarifies that the development of the initial 3,000-ton-per-year-year lithium carbonate plant is ongoing. The repercussions generated by that first line, which warned about a review, led the Australian company to have to clarify its own words in the sustainability report.
“The development and construction of the 3,000-ton-per-annum lithium carbonate plant is ongoing. Camp construction activities continue to progress while the project’s airstrip has been completed, and while we continue with the process plant enabling works and continue to operate our pilot plant,” the statement said.
Escalating costs
Rio Tinto acknowledged that cost increases due to the high demand in the international lithium market have had an impact “on the cost of specific equipment”.
“With the greater precision that we have today of the project, we are reviewing the capital costs accompanying this scenario, which in no way implies a revision of the project,” the statement said.
According to Rio Tinto, “these higher capital costs are also reflected in the advances made in engineering, changes in scope and, as we said, higher specific equipment costs abroad”.