China’s Ganfeng Lithium has finalized the acquisition of a majority stake in Minera Exar, the company jointly owned with Argentinian miner Lithium Americas, for the development of the Cauchari-Olaroz lithium project in Argentina, Lithium Americas said on Friday August 28.
Following the completion of the majority stake acquisition, Ganfeng owns 51% of Exar Minera while Lithium Americas holds the remaining 49%.
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.
It also agreed to provide non-interest-bearing loans of $40 million to Exar Capital, repayable in 2029, subject to an additional one-year extension. The proceeds will be used to repay intercompany loans to Lithium Americas.
The Cauchari-Olaroz lithium project is under construction and is expected to be completed by mid-2021.
Last week, Ganfeng Lithium signed a cooperation agreement with Jiangxi Special Electric Motor (Jiangte Motor) to manage and operate its lithium production lines from October this year, Fastmarkets reported on August 20.
"The fact Ganfeng is expanding capacity by leasing Jiangte Special Motor’s production lines is an interesting development as it gives Ganfeng the ability to increase production capacity quickly without having to wait for another greenfield project to be built... On the one hand, this suggests the company is bullish in the fairly near term outlook for demand, but it should also dispel some of the fears that there will not be enough top quality material around within a few years," head of base metals and battery research at Fastmarkets William Adams said at the time.
Lithium prices have tracked a steady downward trend since 2019, and the outbreak of the Covid-19 pandemic this year has affected both supply and demand in an already low-priced environment.
Fastmarkets’ weekly price assessment for lithium carbonate, 99.5% Li2CO3 min, battery grade, spot price range exw domestic China was 37,000-41,000 yuan per tonne on August 27, unchanged since July 9 but down from 45,000-51,000 yuan per tonne at the start of 2020 and 75,000-83,000 yuan per tonne at the start of 2019.