# Lithium: Extraction

Desert brine ponds versus hard-rock mines

Source page: https://www.materialinsights.org/commodities/lithium/extraction/

What this tab covers How it is mined, drilled or grown, and processed into a tradeable form: the main methods compared, their unit economics, by-products, and the companies that do this work globally and in India.

Lithium comes from two main sources. In the salt flats of Chile, Argentina and Bolivia, brine is pumped into kilometre-scale evaporation ponds; SQM first pumped Atacama brine for potash, with lithium as a by-product (Conway, pdf p. 287). In Australia, Zimbabwe, Brazil and China, hard-rock spodumene is blasted, crushed and concentrated to about 6% lithium oxide. Brine quality varies: Uyuni has under half Atacama's lithium per litre and over three times the magnesium (Conway, pdf p. 293). Hard-rock lithium carries much higher emissions and water use than Chilean brine. Clays and geothermal brines are under development in the US.

Lithium reaches the market by two main routes. In the 'lithium triangle' of Chile, Argentina and Bolivia, salty brine under salt flats is pumped into ponds and the sun concentrates it over a year or more before a chemical plant turns it into carbonate. In Australia, Zimbabwe, Brazil, Mali and Canada, hard-rock spodumene is mined and concentrated to about 6% lithium oxide, then shipped, mostly to China, for conversion into carbonate or hydroxide. China also mines lepidolite and its own brines at higher cost. New methods, direct lithium extraction from brine and clays, are being built out, and recycling is starting.

#### Methods compared

| Method | Share of supply | Typical scale | Recovery / efficiency | By-products | Unit cost |
|---|---|---|---|---|---|
| **Hard-rock spodumene mining + concentration (SC6) + conversion** | about half of 2025 world mine output excluding the US (Australia, Zimbabwe, Brazil, Mali, Canada, Portugal: about 147,000 of 290,000 t Li, USGS), plus part of China's | PLS (Pilgangoora) produced 754,600 t of concentrate in FY2025 | n/a | tantalum, sometimes feldspar and mica | indicative (2023): Australian spodumene production cost $364-1,033/t concentrate; full cost to carbonate via conversion in China CNY 70,000-103,000/t (Mysteel, July 2023). Spodumene SC6 FOB Australia was about $800/t in Jan 2025 and $970/t in Nov 2025 (USGS) |
| **Continental brine evaporation (salars of Chile and Argentina)** | about 27% of 2025 mine output (Chile 56,000 t and Argentina 23,000 t Li), plus Chinese brines | SQM produced about 234,000 t LCE in 2025 from Chile and China; Rio Tinto 57 kt LCE from Argentina and other sites | n/a | potash, iodine (SQM), boron | indicative (2023): South American brine production cost about $3,330-4,700/t LCE; Asian brine CNY 30,000-50,000/t (Mysteel, July 2023) |
| **Lepidolite and other Chinese hard rock** | part of China's 62,000 t Li (21%) in 2025; split by ore type not published by USGS | n/a | n/a | tantalum, niobium, rubidium, caesium, feldspar | indicative (2023): full cost CNY 80,000-130,000/t LCE (Mysteel, July 2023) |
| **Direct lithium extraction (DLE) from brines and clays** | small share of 2025 supply; not separately reported by USGS | Rio Tinto guides 61-64 kt LCE in 2026 across all its lithium operations (brine and DLE combined) | n/a | n/a | n/a |

#### How each method works
**Hard-rock spodumene mining + concentration (SC6) + conversion**

Pegmatite is mined by open pit, crushed and upgraded by dense-media separation and flotation to SC6 concentrate. Concentrate is shipped to converters, mostly in China, which roast it, leach with sulphuric acid and precipitate carbonate or hydroxide.

Fast to build and ramp, but costlier, more energy- and emission-intensive, and dependent on Chinese conversion.
 USGS MCS 2026; Australian Mining (PLS FY2025 results); Mysteel 2023 **Continental brine evaporation (salars of Chile and Argentina)**

Brine is pumped from beneath salt flats into a series of ponds where solar evaporation over many months precipitates halite and potash, concentrating lithium. The concentrate is trucked to a plant that removes magnesium and boron and precipitates lithium carbonate.

Lowest cost and lower emissions, but slow to expand, water-use disputes with communities, and royalty and state-partnership terms in Chile.
 USGS MCS 2026; SQM Q4 2025 earnings call (Yahoo Finance); Rio Tinto Q4 2025 operations review (SEC 6-K); Mysteel 2023 **Lepidolite and other Chinese hard rock**

Lithium-bearing mica (lepidolite) in Jiangxi is mined and treated with sulphate or chloride roasting and leaching. Grades are low, so large volumes of tailings result, and the route is the marginal, highest-cost supply that switches off first in price slumps.

Domestic Chinese supply that responds fast to price, but high cost and environmental scrutiny.
 USGS MCS 2026; Mysteel 2023 **Direct lithium extraction (DLE) from brines and clays**

Adsorbents, ion-exchange resins or membranes pull lithium straight from brine, which is then reinjected, cutting the pond stage from months to hours. Rio Tinto's Fenix operation in Argentina uses a selective adsorption process; clay projects in Nevada and Mexico use acid leaching.

Higher recovery and smaller footprint, but each brine needs its own chemistry and capex is high; S&P Global (Sept 2025) flags technology and quality risks in the next project wave.
 Rio Tinto Q4 2025 operations review; S&P Global Market Intelligence, Sept 2025; USGS MCS 2026 Unit economics are indicative ranges from the sources named; costs vary widely by deposit, region and year.

#### By-product supply

Lithium is mostly a main product, but the brine route ties it to potash: SQM began pumping Atacama brine for potash with lithium as a by-product (Conway, Material World), and potash, iodine and boron still share the same ponds. Hard-rock lithium is mined for its own sake, so supply responds to price, though with a lag of several years for new mines and converters.

#### Share produced as a by-product
 About 55% of primary supply comes as a by-product of potash/salt brines (Nassar, Graedel & Harper 2015, approximate).

#### Who does it: global

| Company | Country | Activity | Volume | Year | Source |
|---|---|---|---|---|---|
| **SQM** | Chile | brine mining and chemicals (Atacama), China conversion | 234 kt LCE (production) | 2025 | [SQM Q4 2025 earnings call, via Yahoo Finance](https://finance.yahoo.com/news/sociedad-quimica-y-minera-q4-171553093.html) |
| **Ganfeng Lithium** | China | mining (Argentina, Mali, China), conversion, batteries | 182 kt LCE (production; sales 184.8 kt) | 2025 | [Asian Metal, 2026](https://www.asianmetal.com/news/2308333/Ganfeng-Lithium's-annual-LCE-output-jumps-40-YoY) |
| **Albemarle** | US | brine (Chile, US), spodumene (Greenbushes stake, Wodgina), conversion | 2.71 US$ bn Energy Storage net sales (volume in kt LCE not stated in release) | 2025 | [Albemarle Q4 and full-year 2025 results](https://www.albemarle.com/cl/en/news/albemarle-reports-fourth-quarter-and-full-year-2025-results) |
| **Rio Tinto (incl. former Arcadium Lithium)** | UK/Australia | brine and DLE (Argentina), hydroxide (US) | 57 kt LCE (production) | 2025 | [Rio Tinto Q4 2025 operations review (SEC Form 6-K)](https://www.sec.gov/Archives/edgar/data/863064/000086306426000006/ex1_2025-q4results.htm) |
| **PLS (Pilbara Minerals)** | Australia | spodumene mining (Pilgangoora) | 755 kt spodumene concentrate (production) | FY2025 (to June) | [Australian Mining, Aug 2025](https://www.australianmining.com.au/pls-posts-record-output-eyes-growth-at-colina/) |
| **Tianqi Lithium** Production volume not verified from a company report, so left blank. | China | Greenbushes stake, conversion, SQM shareholder | not published | n/a |  |

#### Who does it: India

| Company | Country | Activity | Volume | Year | Source |
|---|---|---|---|---|---|
| **KABIL (Khanij Bidesh India Ltd)** | India | overseas exploration: five lithium brine blocks in Catamarca, Argentina | 15,703 hectares under exploration (no production yet) | agreement Jan 2024 | [EVreporter, 16 Jan 2024; Energetica India](https://evreporter.com/india-to-develop-five-lithium-blocks-in-argentina/) |
| **Ola Electric (Ola Cell Technologies)** | India | lithium-ion cell manufacture (4680 'Bharat' cell), Krishnagiri | 6 GWh installed cell capacity; plans 20 GWh | May 2026 | [DSIJ, Ola Electric Q4 FY26 results](https://insights.dsij.in/dsijarticledetail/ola-electric-reports-q4fy26-results-net-loss-narrows-to-rs-500-crore-company-plans-20-gwh-battery-expansion-id021-57232) |
| **Agratas (Tata Group)** | India | cell gigafactory, Sanand, Gujarat (under construction) | 20 GWh first-phase capacity; production expected 2027 | 2026 | [pv magazine India, 2 Apr 2026](https://www.pv-magazine-india.com/2026/04/02/agratas-advances-20-gwh-sanand-battery-facility) |
| **Reliance Industries** | India | battery gigafactory, Jamnagar (planned start 2026) | 40 GWh initial annual capacity, scaling to 100 GWh | announced Aug 2025 | [pv magazine India, 1 Sep 2025](https://www.pv-magazine-india.com/2025/09/01/reliance-industries-ltds-battery-gigafactory-set-to-begin-operations-in-2026-with-an-initial-annual-capacity-of-40-gwh) |
| **Amara Raja Energy & Mobility** | India | cell manufacture, Telangana | 2 GWh first commercial cell plant (due 2027); 60 MWh qualification plant commissioned July 2026 | 2026 | [GreenTechLead, 2026](https://greentechlead.com/electric-vehicle/india-ev-and-battery-investments-2026-tata-amara-raja-and-exide-expand-gigafactory-plans-55902) |

India mines no lithium and has no commercial conversion plant, so all lithium arrives inside imported cells or as small chemical imports (India took 0.9% of world lithium hydroxide imports by value in 2024, UN Comtrade). GSI reported 5.9 Mt of inferred lithium ore resources at Salal-Haimana in Reasi, Jammu and Kashmir, in 2023, but two auction attempts drew no bids (Tribune, March 2025) and GSI's G2 exploration was due by January 2026. Under the ACC PLI scheme 40 GWh of the 50 GWh target had been awarded by end-2025, but installed capacity was only about 2.5% of that (GreenTechLead 2026).

## Other sections

- [Summary](https://www.materialinsights.org/commodities/lithium/index.md)
- [Overview](https://www.materialinsights.org/commodities/lithium/overview/index.md)
- [Correlation](https://www.materialinsights.org/commodities/lithium/correlation/index.md)
- [Production](https://www.materialinsights.org/commodities/lithium/production/index.md)
- [Stocks](https://www.materialinsights.org/commodities/lithium/stocks/index.md)
- [Cycles](https://www.materialinsights.org/commodities/lithium/cycles/index.md)
- [Trading](https://www.materialinsights.org/commodities/lithium/trading/index.md)
- [Movement](https://www.materialinsights.org/commodities/lithium/movement/index.md)
- [Criticality](https://www.materialinsights.org/commodities/lithium/criticality/index.md)
- [Characteristics](https://www.materialinsights.org/commodities/lithium/characteristics/index.md)
- [Emissions](https://www.materialinsights.org/commodities/lithium/emissions/index.md)
- [Relationships](https://www.materialinsights.org/commodities/lithium/links/index.md)