China’s largest lithium compounds producer, Ganfeng Lithium, has agreed a multi-million-dollar investment package to partner Canada’s Lithium Americas (LA) in developing and operating Argentina’s Cauchari-Olaroz lithium brine project.
The deal comes after Chilean mining firm Sociedad Quimica y Minera de Chile (SQM) sold its stake in the Argentinian project to a Ganfeng subsidiary.
Ganfeng will acquire a 37.5% interest in the Argentina project to LA’s 62.5%.
Under the terms of the transaction, Ganfeng will buy SQM’s interest in the Argentina project’s holding company— Minera Exar— for an aggregate of US$87.5m in cash, plus a US$50m cash payment deferred until production is under way.
Ganfeng will also provide a loan to Minera Exar for it to repay US$25m of monies owed to LA. In addition, the Chinese firm will set up a US$100m loan facility for LA to fully fund its own share of capital costs at Cauchari-Olaroz.
Construction of Cauchari-Olaroz remains “on track to commence production of battery-grade lithium carbonate in 2020”, the companies said.
The partners have also agreed to discuss “future opportunities” for lithium exploration collaboration in North and South America.
Ganfeng is the world’s third largest lithium producer after US chemical company Albemarle and SQM. Earlier this year, Ganfeng was reported as looking to raise US$1 billion from an initial public offering in Hong Kong to expand its battery-related businesses.