Lake Resources proceeds with Kachi lithium brine demo plant despite technical dispute

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By Imelda Cotton - 
Lake Resources ASX LKE Kachi lithium brine demo plant Lilac Solutions

Lake Resources and technical partner Lilac Solutions are disputing the due dates of Kachi demonstration plant milestones.


Despite an ongoing dispute with project technical partner Lilac Solutions, Lake Resources (ASX: LKE) said work is continuing on a demonstration plant at the Kachi brine project in Argentina.

Construction of a facility to house the demonstration plant is now complete with dry commissioning starting last week and wet commissioning expected to begin before month end.

On-site processing of Kachi brines has been scheduled for early October.

Testing of the demonstration plant will be based on continuous operation over 1,000 hours, including up-time, maintenance and monitoring.

It is anticipated that the first 2,000 litres of lithium concentrate produced will be sent for conversion into lithium carbonate.

Lake said the final lithium product would be qualified by a Tier 1 battery maker to validate product specifications.

Project dispute

Earlier this month, a dispute arose between Lake and Lilac regarding the due dates of demonstration plant milestones including operational hours and production of first concentrates.

The milestones form part of an agreement secured in September 2021, whereby Lilac stands earn up to a 25% stake in Kachi.

Lake said the milestones must be achieved by 30 September 2022 while Lilac has been working to a due date of 30 November.

Lake has exercised its right to have the dispute resolved by mutual agreement or by arbitration.

If the milestones are not achieved by the required date, then Lake will have certain buy-back rights under the agreement which it may exercise at its option.

Once Lilac has secured its 25% interest, it will be expected to invest about US$50 million in developing the Kachi project.

Offtake agreements

In April, Lake announced it had secured an offtake agreement with Ford Motor Company for Kachi product amid forecasts of global lithium supply shortages and increased commodity prices.

Ford’s commitment to purchase around 25,000 tonnes a year of lithium chemicals from Kachi follows an agreement for the same offtake volume signed with Japan’s Hanwa Co in March.

Both agreements are believed to significantly de-risk the Kachi project for financiers and investors.