Ganfeng completes US$70mn deal to up Pastos Grandes stake

In a deal worth US$70 million, China's Ganfeng Lithium has acquired newly issued shares of Proyecto Pastos Grandes, owned by Canada's Lithium Americas (Argentina), increasing its stake in the Pastos Grandes lithium project from 9.25% to 14.9%.

Ganfeng will also support a regional mining expansion plan.

Pastos Grandes, located in Salta province, is in the engineering phase and feasibility studies are underway. It is expected to produce 24,000t/y of battery-grade lithium carbonate, according to its technical report.

“Proceeds from the transaction will be used to strengthen our balance sheet, reduce short-term debt at Caucharí-Olaroz and provide additional flexibility to support our future growth plans,” Lithium Argentina president Sam Pigott said in a statement.

The companies are aiming at synergies, as the Pastos Grandes, Pozuelos and Sal de Puna projects, in the Pastos Grandes salt flat basin, are close to each other and form the Pozuelos-Pastos Grandes (PPG) area.

Lithium Argentina and Ganfeng are also partners in the Caucharí-Olaroz project in Jujuy, 100km from PPG.

Caucharí-Olaroz's first phase is underway, with the prospect of reaching 2024 output of 20,000-25,000t of lithium carbonate equivalent. The second phase could add 20,000t/y.

The operation is managed by Minera Exar, a JV between Lithium Argentina (46.7%), Ganfeng (44.8%) and provincial company Jemse (8.5%). PPG and Sal de Puna are also in Ganfeng's portfolio.

While the outlines of the regional expansion strategy will be revealed by year-end, one priority a Lithium Americas presentation highlighted in May is the search for technologies to complement the current conventional evaporation method at Pastos Grandes.

The statement also mentioned that Argentina's investment incentive regime Rigi will be a positive factor in promoting projects.