CleanTech Lithium is poised to advance its Laguna Verde project towards sustainable lithium extraction, targeting an initial production capacity of 20,000 mt/year by 2027, while navigating regulatory hurdles and market volatility.

After the Chilean government rejected its application for a special lithium operating contract, or CEOL, for its project, the exploration and development company will focus on achieving several key milestones in the coming months, new CEO Ignacio Mehech said in a recent interview.

"These key milestones will be important drivers to advance our sustainable lithium projects in Chile," Mehech said. "Our focus is delivering the pre-feasibility study for Laguna Verde, moving forward with the CEOL, and advancing our proposed Australian Securities Exchange dual listing," Mehech told Platts, part of S&P Global Energy.

Mehech affirmed that the company has submitted an appeal to the Chilean government and remains optimistic about meeting the necessary criteria.

"The timeline to start production depends on our near-term milestones, including the fast-track process for the CEOL, which requires us to secure the contract with the Chilean government to commercially sell lithium," said Mehech, who became CleanTech's new CEO on April 10.

The company projects a 30-year operational life for the project.

South America has emerged as a key player in the global lithium market, with many new projects in development, including CleanTech Lithium. While Brazil seeks to increase its production capacity, the Lithium Triangle, encompassing areas of Chile, Bolivia, and Argentina, faces challenges from prevailing price conditions.

Mehech, who previously served as country manager of Albemarle in Chile, mentioned strong long-term demand driven by the energy transition, which will likely rebalance the market in the coming years. He also said that the PFS will provide critical insights into the economic, geological and technical aspects of the Laguna Verde project.

"Completing the PFS will give us more confidence in the project's viability and help us engage with potential strategic partners as part of our ongoing funding strategy," Mehech said.

Balancing sustainability and cost

CleanTech is implementing direct lithium extraction, allowing the company to scale production appropriately while ensuring it remains economical and minimizes any impact on the aquifer.

"From a cost perspective, brine-based DLE operations generally sit on the lower end of the global cost curve, especially compared to hard rock operations," Mehech said. "This cost positioning is particularly advantageous in the current market environment, where price volatility requires cost discipline and operational efficiency."

Mehech acknowledged the cautious sentiment about paying a premium for lithium produced through sustainable methods.

"As the world shifts from a fossil fuel-based economy to an electrified, low-carbon future, the importance of sourcing lithium from environmentally responsible producers in stable jurisdictions will only grow," Mehech said. "Whether this results in a formal price premium or simply becomes a new industry standard remains to be seen, but we are well-positioned in either scenario."

Mehech also said that collaboration with local communities and other companies was fundamental to building a future-facing lithium industry.

"We are working closely with the Universidad de Atacama to advance lithium processing technologies and training opportunities for students," Mehech said. "These collaborations not only help us drive innovation but also contribute to upskilling within Chile's emerging lithium sector."

Mehech said the company maintains an open dialogue with industry peers and technology providers, particularly those involved in DLE, to share insights and promote best practices.

Navigating market dynamics

Mehech noted that the existing challenges in the broader lithium market were due to oversupply and low prices driven by the dominance of China.

"While the global lithium market is facing volatility, we remain optimistic about the long-term demand for lithium," Mehech said. "We will be assessing financial strategies that prioritize cost efficiency and strategic partnerships while leveraging government incentives and offtake agreements to secure stability."

As geopolitical factors, including potential tariffs and escalating trade tensions, evolve, Mehech emphasized CleanTech's strategy of closely monitoring developments and focusing on project fundamentals, while it is still early to assess the full impact.

"Our base case remains strong: the world is moving toward electrification, and lithium will remain a critical enabler of that transition," Mehech said. "Operating in Chile, a well-established and mining-friendly jurisdiction, gives us confidence in our ability to deliver long-term value."

Platts, part of S&P Global Energy, assessed Lithium Spodumene 5.5-6.0% FOB Brazil prices at $745/mt on April 29 and Lithium Carbonate FOB Lithium Triangle at $8,900/mt, both stable week over week.