Galan Lithium and Chemphys sign offtake agreement

Australian company Galan Lithium and China's Chengdu Chemphys Chemical Industry signed an MOU involving an advance payment of US$40 million, which enables the latter to buy 23,000t of lithium carbonate equivalent (LCE), in the form of lithium chloride, to be produced at the former's Hombre Muerto West (HMW) project in Argentina.

The MOU is valid for five years. The US$104mn HMW project is under construction in Catamarca province and 40% complete. Production start is scheduled for the second half of 2025, Galan said in a statement.

Galan's production plan starts at 5,400t/y LCE in the first phase and foresees a maximum of 60,000t/y in a fourth phase.

“Chemphys is a leader in processing lithium products in China and is a trusted partner to some of the world's largest battery manufacturers,” Galan CEO Juan Pablo Vargas de la Vega said in the statement.

With the MOU, the unsolicited and non-binding offer US startup Energy Exploration Technologies (EnergyX) made this month is on hold. EnergyX offered around US$150mn to buy HMW and the Candelas project, also owned by Galan.

Galan Lithium and Chemphys, which is also an investor in Lithium South through the Hombre Muerto North project, previously established an advance payment offtake agreement.

Another HMW agreement is in place with Swiss giant Glencore, under which prices will be directly negotiated between both parties.