American Lithium eyes Peru production as court rules in its favour

American Lithium (TSXV: LI; NASDAQ: AMLI) said on Wednesday that Peru’s top court had confirmed its local subsidiary’s ownership of 32 out of 172 disputed concessions.

The ruling, consistent with prior legal proceedings, establishes that the miner’s local unit, Macusani Yellowcake, is the rightful owner of the assets in question, American Lithium said.

The decision paves the way for the Vancouver-based miner to open Peru’s first lithium mine in 2027, despite a slow permitting system that tends to keep projects on hold for years.

“It is very encouraging to see that the Peruvian Judicial System continues to support the facts of this case,” American Lithium chief executive Simon Clarke, said in a statement. “The company has never lost title over the disputed concessions, which only represent a small fraction of our leases.”

Its Peruvian subsidiary has continue to advance the Falchani lithium project, which contains 5.5 million measured and indicated tonnes of lithium carbonate equivalent (LCE) in 447 million tonnes at 2,327 parts per million (ppm) lithium. The recently released estimate grew measured and indicated totals by 476% compared to a March 2019 resource.

The Falchani asset, located in Puno, southeastern Peru, is the world’s sixth-largest hard-rock lithium deposit, according to the company’s website. It is expected to bring an US$880 million investment to one of the South American country’s poorest regions.

American Lithium believes Peru can play a crucial role in the impending green energy revolution in the United States, a vision that aligns with the current trajectory of the Biden Administration.

Treasury Secretary Janet Yellen said earlier this month the U.S. needed to support Latin America’s efforts in constructing lithium supply chains, particularly to benefit North American auto manufacturers. Her vision includes sourcing battery-grade lithium from reliable allies in the region, until now dominated by Chile and Argentina.

“With China’s expanding influence within Latin America’s economic landscape, America’s unfolding dynamics not only signify a shift in economic partnerships but also hold vast implications for America’s green energy ambitions,” Clarke said. 

The executive believes Peru’s lithium sector is poised to shake-up the so-called “Lithium Triangle”, an area made up by Bolivia, Chile and Argentina, which holds roughly 65% of global lithium reserves. 

Clarke says once Peru, a copper and silver powerhouse, develops its lithium industry, the area could be known as the “Lithium Square”.

If Mexico and Brazil’s lithium reserves were added, analysts estimate the region would hold nearly 70% of the world’s lithium reserves. 

This would translate into a restructuring of the world economic scenario around the energy transition and a provide a new, sound source of income for Latin American economies, a study by the Latin American Strategy Centre for Geopolitics (CELAG) shows.