Kachi Lithium Deal Could Rewrite Global Supply Race

Strategic review of Kachi deposit signals shift in DLE investment landscape amid weaker prices

19 May 2025

From above, the Kachi salt flat appears as an empty expanse of white. Beneath it lies one of the world’s largest untapped lithium deposits, now the subject of a strategic rethink. Lake Resources, the Australian firm behind the project, has launched a review that may lead to a sale, merger or new partner. Investors, governments and rivals are watching closely.

Kachi was meant to be a proof of concept for direct lithium extraction (DLE), a method that promises faster yields with less water and land disruption. The project boasts over 11 million tonnes of lithium carbonate equivalent, making it one of Argentina’s most valuable unbuilt resources. The company touts the technology’s low environmental footprint as a key advantage over traditional evaporation ponds.

Yet progress has slowed. Weak lithium prices and higher infrastructure costs have made financing trickier. Though Lake has hit several technical milestones, enthusiasm has waned. “Kachi is a world-class asset,” insists David Dickson, Lake’s chief executive, who argues the right financial backing could unlock its potential.

Timing is awkward but opportune. Demand for battery-grade lithium is rising, driven by electric-vehicle mandates in the US, Europe and China. Argentina, part of the "Lithium Triangle" alongside Chile and Bolivia, has recently become more welcoming to foreign capital. Its new government has pledged to cut red tape and fast-track approvals.

Lake’s decision is more than a local story. It highlights the challenge of bridging innovation and scale in the lithium sector. DLE has long been seen as a cleaner, faster alternative, but few projects have moved past the pilot stage. Kachi’s future may set the tone for whether the method can meet global demand in practice, not just in theory.

Whoever takes over the reins at Kachi will not just inherit a deposit. They will gain a test case for how lithium will be mined, financed and supplied in the next decade. In the race for cleaner supply chains, DLE still offers promise. But it will take more than good chemistry to deliver.