Australia-based Lake Resources chairperson Stu Crow has expressed confidence in the company’s future despite recent downturns in the lithium market, including falling prices, reduced investment, and several projects being put on care and maintenance.

While acknowledging the industry’s current struggles, he highlighted the long-term positive outlook for lithium and the critical role that projects such as Lake’s Kachi lithium project, in Argentina, will play in meeting future demand.

“The longer-term outlook remains bright,” Crow stated, referencing the well-known mining adage that “the solution to low prices is low prices”.

The company is focusing on the broader market trends, where analysts predict a supply shortage as early as the end of this decade. Citing Benchmark Mineral Intelligence, Lake states that the lithium market will require $94-billion of investment just to meet 2030 demand, with the figure doubling for 2040. In simple terms, analysts project that the world will need about 68 Kachi Phase 1 projects to balance the market by 2030.

Lake’s Kachi project stands to play a critical role in addressing this projected supply gap. Dickson pointed to recent improvements in Argentina’s political climate, noting that the July 2024 announcement of a new incentive regime for foreign investment in the country could pave the way for more efficient development of lithium projects. Argentina's push to strengthen trade relations with the US, especially under President Javier Milei’s administration, is expected to facilitate increased lithium exports to the US battery market.

“The political environment in Argentina for foreign investment has improved significantly,” Crow said, adding that Lake remains optimistic about a pathway for Kachi lithium to enter the US market as a significant source of battery-grade lithium carbonate.

Highlighting the growing global recognition of Argentina’s lithium potential, he also pointed to Rio Tinto’s $6.7-billion acquisition of Arcadium, which underscores the significant value of lithium brine projects in the country.

In the meantime, the board is focused on ensuring Lake is “right-sized” for current conditions. In March, Lake announced a substantial reduction in global headcount and other cost-saving initiatives. “These initiatives regrettably required some talented people leaving our company.”

As well as cost cuts, Lake has actively sought to extract maximum value from its lithium assets. In this regard, Lake earlier this month announced the sale of three noncore lithium brine assets in Argentina for $9-million.

“The sale of these assets in Jujuy province, namely Paso de Jama, Olaroz and Cauchari, has given the company valuable funds to support our financial runway. Funding and closing of this sale is expected to be completed by the end of calendar year 2024,” said Crow.