Next month will mark seven years since the mining company Macusani Yellowcake announced the existence, in the Puno region, of what was then called the “largest lithium mine in the world”: the Falchani project.
By Juan Saldarriaga
It was news that placed Peru at the center of international attention and triggered a local frenzy for ‘white gold’.
Now, six years and eleven months later, the project shows no significant progress, raising major concern within the Ministry of Energy and Mines (Minem).
The minister, Jorge Montero, did not hesitate to criticize the mining company for its “almost null progress in recent years” and for failing to fulfill its investment and development obligations.
A mining concession, he said, should be an opportunity to invest—not one where “decades pass with no results.” As a result, Falchani is no longer listed in the 2025 Mining Exploration Projects Portfolio.
Falchani is not included in the Ministry’s project exploration portfolio this year. This is because the General Directorate of Environmental Mining Affairs (DGAAM) rejected the Semi-Detailed Environmental Impact Study (EIAsd) submitted by Macusani Yellowcake “for failure to resolve the observations.”
In a statement to Infobae, the company said it expected to begin the Environmental Impact Study (EIA) this year, “which is the final requirement to begin construction of the mine and lithium exploitation,” starting in 2028—unless, they noted, delays in permits and paperwork “impact the company’s financial and operational schedule.” However, bureaucratic processes are not the only challenge the project faces.
Negative factors
One added complexity is the lack of legislation allowing uranium exploitation—a radioactive mineral found in association with lithium in Falchani—notes Miguel Cardozo, president of Alturas Minerals.
Another major challenge is the sharp drop in lithium prices, which “have plummeted from a peak of US$70,000 per ton to US$9,000 in just two years,” states Andrés González Eyzaguirre, Lead of Mining Industry at the Chilean consultancy Plusmining.
This situation, he explains, complicates the development of many lithium projects worldwide—especially hard rock lithium projects, which are costlier to produce than brine-based lithium. Falchani is the sixth largest hard rock lithium project in the world.
Projects in Australia and Brazil (spodumene) are at serious risk of negative returns during “this period of low prices,” with some potentially facing temporary shutdowns.
Something similar could happen with Falchani, which, despite being a hard rock lithium project, is unique for being part of a select group of volcanic origin deposits. This very uniqueness makes it hard to project the potential cost of the project, explains González Eyzaguirre.
“But regardless of that, the fact that prices are falling and so low is discouraging and makes any lithium project less attractive globally,” the analyst emphasizes.
What will happen with lithium exploration in Peru?
Lithium exploration
A source closely connected to communities near Falchani confirms the project is paralyzed. “Falchani is currently the only lithium possibility in the country,” notes Miguel Cardozo.
Lithium is an essential mineral for the production of electric vehicle batteries. The geologist recalls that a couple of years ago, Ingemmet carried out nationwide sampling for lithium, but results showed very low anomalies in most areas. Some southern areas showed “slightly higher anomalies, but they haven’t been explored yet,” adds Cardozo. Overall, exploration efforts fall short of hopes to find new lithium deposits.
“Less than 1% of mining exploration investment in Peru is directed toward lithium,” says Walter Tejada, exploration manager at BHP Peru.
According to Minem’s Mining Exploration Projects Portfolio, lithium ranked fifth among Peru’s most explored metals in 2024, with a committed investment of US$21 million. Now it’s in eighth place, with only US$6 million invested.
Other metals that surpass it include copper (US$612 million), gold (US$181 million), tin (US$105 million), zinc (US$88 million), silver (US$18 million), iron (US$17 million), and uranium (US$10 million).
Lithium exploration is very scarce in Peru. (Source: Minem) This, Tejada says, reflects the strengths and weaknesses of Peru’s geology. “It shows that we should focus on minerals with stronger long-term fundamentals, such as copper and gold, which are the most abundant in our subsoil,” the geologist advises.
Future
González Eyzaguirre, however, foresees a better future for lithium toward the end of this decade.
“The consensus is that lithium prices are currently very low; therefore, long-term prices are expected to reach US$13,000 and even US$20,000 per ton,” he says.
In his view, these price levels are more appropriate than the incredible 2022 highs. Indeed, “a very high price sustained over time can drive battery manufacturers to make serious efforts to substitute lithium.” “And that could make the problem even worse,” he adds.
Source: El Comercio