The two French companies will have access to concessions on several lithium-rich salt lakes in northern Argentina.
The deal will enable Bollore and Eramet to start exploration in order to estimate the resource and launch studies on a project for a lithium carbonate production unit. Lithium carbonate is the raw material from which the lithium salts and lithium metal used in rechargeable batteries are produced.
The call option gives the Bollore-Eramet consortium the right to acquire those concessions following the studies, within 24 months.
Lithium is expected to be in increasing demand as carmakers look to costly but more efficient lithium-ion batteries to power hybrid and electric vehicles.
Around 25 percent of world production goes to batteries, 18 percent to ceramics and glass and 12 percent in lubricants.
Lithium is usually extracted from brine pools, an innovation of the mid-1990s that also saw many more costly hard-rock mining operations close.
Lithium is the 25th most abundant element in the earth’s crust, on par with nickel and lead, but commercially viable deposits are less common.
According to latest U.S. Geological survey data, Chile was the world’s biggest lithium miner in 2008, producing 12,000 tonnes, followed by Australia, China and Argentina.
Global identified lithium resource stand at around 14 million tonnes, including reserve bases of 5.4 million tonnes in Bolivia, 3 million tonnes in Chile and 1.1 million tonnes in China.
The USGS resource estimate is enough to produce some batteries for around 3.5 billion vehicles based on the 4 kilograms of the metal in the battery of the Nissan LEAF electric vehicle. The world’s oceans may contain a further 230 billion tonnes of lithium, albeit at very low concentrations.