China’s Ganfeng Lithium has received regulatory approval from the country's National Development and Reform Commission (NDCR) to increase its stake in the Caucharí-Olaroz lithium project - a joint venture with Lithium Americas - in northern Argentina to 51%.
In February, Ganfeng Lithium agreed to pay $16 million to raise its ownership in the project by 1% by buying new shares from Minera Exar, the jointly owned holding company for the project.
At the time, it also agreed to provide non-interest-bearing loans of $40 million to Exar Capital, repayable in 2029, although subject to an additional one-year extension. The proceeds will be used to repay intercompany loans to Lithium Americas.
Ganfeng’s purchase of the additional stake will reduce Lithium Americas’ share in Caucharí-Olaroz to 49%.
In April 2019, the Chinese company invested $160 million in the project by buying an earlier issue of shares that raised its holding to 50% from 37.5%.
The Cauchari-Olaroz lithium project is currently under construction and is expected to be complete by mid-2021.
China’s lithium market came under increased pressure this past week amid ongoing weak downstream demand, prompting producers to lower prices to boost sales.
Fastmarkets’ weekly price assessment for lithium carbonate, 99.5% Li2CO3 min, battery grade, spot price range, exw domestic China was at 39,000-42,000 yuan per tonne ($5,502-5,925) on June 18, down by 2.4% from 40,000-43,000 yuan per tonne the previous week and a decline of 15.6% from 45,000-51,000 yuan per tonne at the start of this year.