Advantage of producing carbonate from hard rock vs brine Hard-rock producers' costs less than half that of brines
The cost of producing concentrate at hard-rock lithium mines is generally lower than that of producing lithium chemical products from brines.
In 2019, the average total cash cost across 11 operating hard-rock producers is expected to be US$2,540/t LCE, which compares with US$5,580/t LCE across nine brine operations.
The most significant cost component at hard-rock mines is labor, which will make up almost 30% of total cash costs in 2019, compared to just 9% at brine producers.
This is a result of the relatively high wages paid in Australia, where seven of the 11 hard-rock assets are located. Labor accounts for a lower proportion of brine operations' costs because of the comparative lack of personnel required to extract the resource out the ground, which is done via extraction wells, compared to conventional mining techniques.
For brine assets, the biggest cost component is reagents for the downstream processing, which we forecast will account for 36% of total cash costs in 2019