SALTA - France's Eramet aims to start production at its new Centenario lithium plant in Argentina in November and ramp up to 24 000 metric tons of battery grade lithium by mid-2025, it said on Wednesday after starting the final test phase at the plant.

The $870-million plant, a joint venture with Chinese nickel and steel giant Tsingshan, is likely to be among the first worldwide to use an innovative processing system called direct lithium extraction, or DLE, at commercial scale.

That makes it a key test for the promising technology that helps speed up lithium production even as governments and car makers race to secure supply of the ultra-light metal needed for many of the batteries that power electric vehicles.

Argentina, which sits in South America's so-called "lithium triangle," is the world's fourth largest producer of the metal and is looking to rev up output with a slate of new projects set to come online later this year.

Eramet's Centenario project, in northern Salta province, is set to be the first to start production, with the company now testing the equipment and production processes in a key phase known as commissioning.

Eramet, which owns 50.1% of the project, is requesting permits for a second plant with a capacity of 30,000 tons, with construction likely to begin next year. It plans to eventually build a third plant of the same size.

The company is hopeful that a recent new economic reform bill passed in Argentina's Senate that includes plans to incentivize large investments, including tax sweeteners and ease of access to currency exchange markets, could help boost those expansion plans.

"The most important for us is the free currency exchange, the freedom to bring dollars to get dollars out," said Eramet CEO Christel Bories in an interview with Reuters.

Looking at neighboring Chile, she said the country has struggled to draw as many new lithium projects as in Argentina, but that Eramet planned to keep pressing ahead to develop a lithium project.

The company bought a mining concession last year in a lithium salt flat and is evaluating whether to submit a proposal to work with state-run miner Codelco on a major new lithium project in the Maricunga salt flat. It is partnering with junior mining companies as well on exploration.

"Our objective is to gradually build a portfolio of very early stage to more mature opportunities in Chile," said Geoff Streeton, Eramet's head of strategy.

"We're also conscious that that requires giving the time and space for the Chilean lithium policy to develop," he said.