Ganfeng invests $160mln to increase ownership in JV with Lithium Americas

China’s Jiangxi Ganfeng Lithium has agreed to invest $160 million to increase its ownership in the Cauchari-Olaroz lithium joint venture project with Lithium Americas by buying Minera Exar’s 141 million newly issued shares, the holding company for Cauchari-Olaroz lithium brine project in Northern Argentina said on Monday April 1.

April 1, 2019

By Martim Facada

Ganfeng will increase its ownership of Cauchari-Olaroz lithium brine project to 50% from 37.5%, reducing Lithium Americas’s 62.5% share to the remaining 50%.

The new agreement includes the development of a feasibility study to increase Cauchari-Olaroz lithium carbonate production by 15,000 tonnes to 40,000 tonnes per year, from 25,000 tpy currently.

Of the previously-agreed 25,000 tpy capacity, Lithium Americas has an offtake agreement to supply 10,000 tpy of lithium carbonate to Ganfeng and a second offtake agreement to supply 2,500 tpy of lithium carbonate to Bangchak Corp Public Co.

The remaining 12,500 tpy of lithium carbonate from the initial production is owned by Ganfeng.

The Cauchari-Olaroz lithium brine project is set to start production in the second half of 2020, with a full ramp-up of the initial 25,000 tpy of lithium carbonate within 12 months of starting production.

“Ganfeng Lithium will play a key role in the process definition, engineering and commissioning of the lithium chemical plant, leveraging their track record as the world leader in the production of high-quality lithium compounds for electric vehicle and battery customers,” Gabriel Rubacha, Lithium Americas president of South America operations, said.

Fastmarkets’ domestic Chinese lithium carbonate min 99.5% Li2CO3 battery grade price was 72,000-80,000 yuan ($10,728-11,920) per tonne on Thursday March 28, steady week on week. The price has been more or less rangebound so far in 2019, but is down from 145,000-150,000 yuan per tonne in April last year.

Cauchari-Olaroz lithium brine project is fully funded with an estimated capital cost of $425 million and an expected mine life of 40 years, according to Lithium Americas.

This is the second lithium supply deal involving Ganfeng within the past seven days, after the Chinese company secured additional lithium spodumene produced by Pilbara Minerals in Western Australia on March 26.

Ganfeng is one of the top Chinese lithium producers with a production capacity of as much as 68,500 tpy of lithium carbonate equivalent (LCE) in 2018.