China's CNGR advancing deal to acquire Argentine lithium project

Chinese battery component producer CNGR Advanced Material is advancing on an agreement to acquire Australian battery minerals explorer Lithium Energy's 90% stake in Argentina's Solaroz lithium project for US$63 million.

CNGR secured Chinese regulatory approval earlier this week, the Perth-based seller said in a statement.

The agreement will be finalized through the subsidiary CNGR Netherlands New Energy Technology, which was chosen in a partner search process to finance the project in Jujuy province and because of its interest in acquiring the entire project. 

“One of the conditions was that we continue to maintain and advance environmental approvals with local governments to continue drilling and exploration,” William Johnson, president of Lithium Energy, a Tesla supplier, said in an interview with Australian media in May. 

The sale is expected to clear all hurdles by October 25.

Solaroz is located in the Salar de Olaroz, close to Caucharí-Olaroz of Lithium Americas and Ganfeng Lithium and Salar de Olaroz of Arcadium Lithium.

Based on studies last year, its indicated and inferred mineral resources amount to 3.3Mt lithium carbonate equivalent (CLE) and a high-grade core was identified with an average concentration of 400 mg/l lithium.

Tests are currently being carried out with the brine in conventional evaporation ponds, which have yielded a first sample of battery-grade lithium carbonate of 99.5% purity in a local laboratory.

In addition, a direct extraction technology is being piloted under an agreement with Xi'an Lanshen New Material Technology that includes the construction of a plant to produce 3,000t of battery-grade CLE annually.

According to media reports, CNGR executives have recently visited other lithium deposits in Argentina, including the Jama project in Jujuy and Rincón in Salta.

The Chinese company said in September that it seeks to create a supply chain capable of producing batteries for over 1 million electric vehicles per year.