Ganfeng to finance lithium project of Minera Exar in Argentina

China’s major lithium producer Jiangxi Ganfeng Lithium will provide financial assistance of no more than $100mn to Minera Exar S.A. — a joint venture between Canada-based Lithium Americas Corp. and Ganfeng Lithium — to promote the development and construction of the Cauchari-Olaroz lithium salt lake project in Argentina, Argusmedia.com reports.

The project has a designed capacity of 40,000 t/yr of lithium carbonate equivalent and is scheduled to start production in 2021.

Ganfeng’s wholly owned subsidiary GFL International Co. Ltd., Xinyu, China, will provide financial assistance to the Cauchari-Olaroz project, in which Ganfeng will obtain a 76 percent underwriting right.

The transaction is aimed at helping advance the development of the Cauchari-Olaroz project and is in line with Ganfeng’s new energy vehicle (NEV) industry development strategy, according to the Chinese producer.

Ganfeng in November 2018 completed its acquisition of Chilean lithium producer SQM‘s interest in the Cauchari-Olaroz project. Its subsidiary Ganfeng Lithium Netherland (Netherland Ganfeng) has a 51 percent stake now, with Lithium Americas holding the remaining 49 percent.

Rapid developments in the NEV market in the past three years have bolstered demand for lithium salts, mainly lithium carbonate and hydroxide. Spot demand from the power battery sector has risen over the past few weeks as many battery producers ramp up output to meet rising demand from NEV manufacturers.

China’s NEV industry was hit by the Covid-19 outbreak in this year’s first quarter. The market began to recover in the second quarter, supported by government stimulus measures to encourage the use and purchases of such vehicles.

The country’s state council at the beginning of November announced a development plan for the NEV industry in 2021-35, targeting a 20 percent share of NEVs in the country’s total vehicles sales by 2025, which supports the demand for battery materials in the long run.

Ganfeng has been strengthening its investment and development capability in the new energy industry. It entered the cobalt sector, another key battery raw material, by acquiring a 6.9 percent stake in Ganzhou Tengyuan Cobalt in June.

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