China's Ganfeng boosts stake in Argentina lithium project
April 1 (Reuters) - China’s Ganfeng Lithium Co said on Monday it would spend $160 million to boost its ownership stake in an Argentina lithium project with Lithium Americas Corp, part of a plan to solidify its access to the white metal used to make electric vehicle batteries.
The deal, which must still be approved by shareholders, will see Ganfeng boost its ownership in a joint venture that controls the Argentina project to 50 percent from 37.5 percent.
The cash will be used to further develop the project, known as Cauchari-Olaroz, both companies said.
“This further cements our partnership with Ganfeng,” Jon Evans, Lithium Americas’ president, told Reuters. “Our single goal is to get this into production.”
Lithium Americas is “very comfortable” with the 50-50 joint venture split and does not expect to sell more of its ownership stake, Evans said.
The pair also said they would study how to eventually boost the project’s output of lithium from 25,000 tonnes per year to 40,000 tonnes per year. The project is slated to start production in 2020.
For Lithium Americas, the deal is a vote of confidence in its management team and development of the lithium-rich brine deposit in Argentina’s far north, near similar operations under development by Neo Lithium Corp and Advantage Lithium Corp.
The cash infusion helps Lithium Americas closer to its goal of being Argentina’s largest producer of the white metal, ahead of Orocobre Ltd and Livent Corp, the nation’s two existing lithium producers.
For Ganfeng, the project further guarantees its access to lithium as the company eyes ways to expand its dominance over the electric vehicle battery supply chain. Ganfeng supplies lithium to Tesla Inc and LG Chem Ltd.