International Lithium close to update on hotly awaited Ganfeng Argentina entry
International Lithium Corp. (TSXV: ILC) is close to going ahead with a pre-feasibility study on the Mariana project in Argentina in 2018, a step that will provide key details on the pace of overseas expansion of Jiangxi Ganfeng Lithium Co., China’s biggest lithium processor.
The two companies are readying a “very important” budget to carry out an economic assessment and pre-feasibility study for Mariana, a lithium-rich salt-lake in Argentina’s northwest Salta province, International Lithium CEO Kirill Klip told InvestorIntel. The two companies plan to bring production online in three years from now, he said.
Ganfeng’s timetable in developing Mariana may effectively serve as a bellwether for the state of global lithium supply. The company is the largest integrated supplier of refined lithium in the world and provides a host of products including lithium carbonate to Panasonic, which in turn provides battery cells for Tesla’s Gigafactory in Nevada.
The Xinyu, China-based company possesses the technical expertise needed to understand the chemistry of Mariana’s brine and how that fits into Ganfeng’s logistics chain. “We are already plugged into Ganfeng’s supply chain,” Klip said. “This is what sets us apart from other junior exploration companies.”
The Chinese company has made multiple investments in lithium projects. Ganfeng owns 43% of Mt Marion, an Australian lithium spodumene project, a 17% stake in Lithium Americas, also based in Argentina, and a 5% stake in Pilbara Minerals that plans to start output in the next six months and sell the output to Ganfeng. Automakers and electrical appliance makers’ search for long-term supply contracts has become an industry standard, according to Albemarle Corp., the world’s largest lithium producer.
International Lithium publicized the results of trial pump tests on December 6th carried out by Australian Geos Mining Minerals, confirming the suitability of the Llullaillaico salt-lake for brine extraction. The aquifer system has high transmissivity and high hydraulic conductivity, must haves for a brine operation, Klip said. Another test back in September showed that the operator could directly extract lithium hydroxide from raw brine, without the need for a traditional evaluation process.
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“These tests pave the way for us to determine the best technology and economic scenario to advance our Mariana lithium joint venture project,” Klip said.
Brine operations have traditionally been the lowest cost in the lithium industry, requiring much less heavy machinery to extract raw material as they rely on evaporation to dry out minerals normally rich in lithium and potassium.
SQM and Albemarle have dominated world supply lithium supply since the 1980s from the Atacama Desert in northern Chile, along with Philadelphia-based FMC Corp. in neighboring Argentina. SQM, Albemarle and FMC’s stronghold on global supply was weakened in 2012 when Albemarle and China’s Tianqi Lithium carried out a major expansion of the Greenbushes mine in Western Australia, and supply that the automotive and electronic components industries say is much needed because of an expected surge in global demand.
Since the 2015 election pro-business reformist Mauricio Macri, Argentina has become a hotbed of mining exploration activity, especially in the northwest of the country that forms part of South America’s so-called Lithium Triangle along with Chile and Bolivia.
Australia’s Orocobre started Olaroz, the country’s second lithium operation, in 2015, partnering with Toyota Tsusho Corp. Private equity firm Sentient Group is developing its Salar de Rincon project in Argentina.
International Lithium holds a strategic stake in Mariana and together with its 10% back-in right can boost this to over 20%. The two companies are also working to explore the Avalonia project in Ireland, while International Lithium holds exploration concessions in Ontario, Canada.
Publishers Note: This piece was written by Guest Editor Matt Craze. We will have his bio listed in next 24 hrs.
Matt Craze has covered commodity markets for more than 20 years, working as a research at CRU International, and for over 10 years as a ... <Read more about Matt Craze>