What Is the Cost of a Lithium Processing Plant?

3d picture of a lithium processing plant in Zimbabwe

Lithium is the invisible hero behind electric vehicles (EVs), smartphones, and renewable energy storage. But turning raw lithium into battery-ready material isn't just technically complex—it's expensive. If you've ever wondered how much it costs to build and run a lithium processing plant, this easy-to-read guide breaks it down step by step.

Lithium processing plants take raw lithium from two main sources and refine it into forms like lithium carbonate or lithium hydroxide, which are used in batteries. Here's where the lithium comes from:

a. Brine Deposits: Saltwater pumped from underground (common in Chile, Argentina, and Bolivia).

b. Hard Rock (Spodumene): Mined from rocks (common in Australia and Canada).

The plant removes impurities and transforms the raw material into a product ready for battery makers like Tesla or Panasonic.

Flotation workshop in a lithium processing plant

The total cost of a lithium processing plant depends on five main factors:

1. Extraction Method: Brine vs. Hard Rock

The biggest cost driver is how you extract lithium:

a. Brine Processing

How It Works: Saltwater (brine) is pumped into giant evaporation ponds. Over 12–24 months, sunlight and wind evaporate the water, leaving behind lithium concentrate.

Cost to Build: $500 million to $1.5 billion.

Pros: Low operating costs.

Cons: Slow, needs lots of land, and depends on sunny weather.

b. Hard Rock Processing

How It Works: Rocks are crushed, roasted at 1,100°C, and treated with chemicals to extract lithium.

Cost to Build: $400 million to $1 billion.

Pros: Faster (6–12 months to start producing).

Cons: High energy use and expensive equipment.

c. Which Is Cheaper?

Short Term: Hard rock plants cost less upfront.

Long Term: Brine plants have lower operating costs. (More about methods of lithium extraction)

A ball mill for processing lithium

2. Location

Where you build the plant matters:

Chile's Atacama Desert: Ideal for brine plants (sunny, dry climate) but remote.

Australia: Top hard rock producer but has high labor costs.

Argentina: Lower labor costs but less infrastructure.

Infrastructure Costs:

Building roads, power lines, and water pipelines in remote areas can add $50–$200 million to the budget.

3. Energy and Labor

Energy: Hard rock processing uses 3x more energy than brine. Energy bills can hit $150 million/year.

Labor: A medium-sized plant employs 200–500 workers. In Australia, skilled workers earn $80,000+/year vs. $20,000 in South America.

4. Environmental Rules

Strict laws increase costs:

a. Waste Management: Storing toxic byproducts (like tailings) adds $5–$30 million/year.

b. Water Use: Brine plants in dry regions may need to recycle water, costing $10–$50 million.

5. New Technology: Direct Lithium Extraction (DLE)

How It Works: Uses filters, chemicals, or magnets to pull lithium from brine in hours instead of months.

Cost: Pilot plants cost $50–$200 million. If successful, DLE could cut operating costs by 30%.

Pros: Faster, uses less water, works in cooler climates.

Cons: Still experimental and unproven at large scale.

Hydrocyclone for processing lithium ore

1. Upfront Costs (CAPEX)

These are one-time expenses to build the plant:

Land & Permits: $10–$100 million (varies by country).

Equipment: Crushers, filters, and reactors cost $200–$500 million.

Construction: $150–$400 million for buildings and infrastructure.

Example: Albemarle's Kemerton plant in Australia cost $1.2 billion to build.

2. Ongoing Costs (OPEX)

These are yearly expenses to run the plant:

Energy: $30–$150 million (higher for hard rock).

Chemicals: Acids and solvents cost $10–$50 million.

Maintenance: $15–$60 million for equipment repairs.

Labor: $20–$100 million (depends on location).

A lithium ore processing plant under construction

a. Recycling: Old EV batteries could supply 30% of lithium by 2030, cutting mining needs.

b. Renewable Energy: Solar-powered plants (like in Chile) cut energy bills by 40%.

c. Water-Saving Tech: DLE and closed-loop systems reduce water use in dry regions.

Q: Which is cheaper—brine or hard rock?

A: Brine has lower operating costs, but hard rock plants produce lithium faster.

Q: How long does it take to build a lithium plant?

A: 2–5 years, depending on permits and technology.

Q: Is lithium processing eco-friendly?

A: Traditional methods have a large environmental footprint, but DLE and recycling are greener.

Q: Why is lithium called “white gold”?

A: Due to its high value and critical role in clean energy tech.

Flotation cells for processing lithium ore

Building a lithium processing plant costs $400 million to over $1.5 billion, depending on the method, location, and scale. While brine processing is cheaper in the long run, hard rock offers quicker returns. Innovations like DLE and recycling could slash costs and environmental harm, making lithium production cleaner and more efficient. As EVs and renewables dominate the global economy, affordable lithium processing will remain key to a sustainable future.

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