Galan slows construction of Argentine lithium project pending financing

Australia’s Galan Lithium has slowed construction of the first phase of the Hombre Muerto West (HMW) project in Argentina’s Catamarca province to preserve cash while awaiting a sales agreement and a package of funding.

The start of production is now expected in 2H25, after having been projected to begin in the first half of next year, the Perth-based company said in a statement on Friday.

Galan is negotiating with potential partners and hopes to reach an agreement soon.

Managing director Juan Pablo Vargas said the company has received strong international market interest, which is influenced by the low energy cost that HMW will have due to the use of extractive pumps and an operational system with evaporation wells.

He also said “the current lithium pricing environment and market oversupply is not expected to be a long term trend.”

If other methods had been implemented, such as direct extraction technologies, energy consumption would have been substantially higher, the company says.

Meanwhile, the company said the average brine flow rate, lithium grade and evaporation rates are in line with or better than those used in the feasibility study for phase 1. 

The latest studies and drilling estimated resources totaling 7.9Mt of lithium carbonate equivalent (LCE) with a content of 883mg/l.

The project is 40% complete and nearly 750,000m2 of the evaporation area has been built, "sufficient to produce a lithium chloride volume of approximately 3.0 ktpa LCE," Galan said.

In addition, it has accumulated 2,800t in the tanks that were designed for capacity of 10,000t/y of LCE, and with it the company estimates that the first phase of HMW will produce 5,400t/y of LCE in a lithium chloride concentrate.

The volume is due to increase through three other stages, achieving in the second production of 21,000t/y of LCE in 2026, in a third 40,000t/y in 2028 and in a fourth 60,000t/y by 2030.

This last phase would include brine from the Candelas project, which also belongs to Galan, the document adds.

At the end of May, the company raised nearly US$10mn in a share placement, where both Australian and foreign investors and institutions participated, providing financial flexibility as well as working capital.

Credit: Galan Lithium