China’s Ganfeng Lithium buys SQM’s stake in Argentinian brine project

Chinese firm Ganfeng Lithium has purchased a 50% stake in the Cauchari-Olaroz project from Chilean lithium giant SQM in a deal worth US$87.5 million.

The deal gives Ganfeng a 37.5% ownership in the brine project, located in Argentina’s Jujuy Province, with the remaining stake held by Canada’s Lithium Americas.

Ganfeng also said it will work with Lithium Americas to “explore future opportunities to jointly develop lithium resources across North and South America.”

The deal also stipulates that the Chinese company will pay SQM an additional $50 million if the project’s goals for selling lithium are met, SQM said in a statement.

The acquisition comes ahead of Ganfeng’s IPO in Hong Kong, which is expected to raise around $1 billion and is the latest attempt by a Chinese company to break into South America’s lucrative lithium brine market.

Earlier this year, Tianqi Lithium made a $4.1 billion offer for a 24% stake in SQM, which has yet to be approved by Chile’s antitrust regulators.

The Cauchari-Olaroz project has been slated to begin production in 2020, when it will provide battery grade lithium carbonate to an increasingly hungry electric vehicle market.