10 Feb China’s Gangfeng takes controlling stake in Argentina lithium project JV
China’s Ganfeng Lithium Co has announced it will take control of an Argentinian lithium project it has been developing in tandem with Lithium Americas Corp.
Gangfeng will pay US$16 million to Lithium Americas, thereby increasing its stake in the Cauchari-Olaroz project by one percentage point to 51%. The New York and Toronto-listed company will retain a 49% stake and also get $40 million cash.
The deal increases Gangfeng’s dominance in the lithium supply chain out of Argentina, which shares the so-called South American lithium triangle with Bolivia and Chile.
Meanwhile for Lithium Americas, the move will help the company reduce its growing debt pile while reducing its exposure to recession-hit Argentina, as it develops another lithium project in Nevada.
“We don’t know what could happen in Argentina long term,” Lithium Americas chief executive Jon Evans told Reuters. “We see Nevada as a better place to put our money.”
In contrast, Gangfeng’s vice-chairman Xiaoshen Wang reiterated the company’s commitment to investing in Argentina, despite the country struggling with a steep recession and inflation above 50%.
Evans added that he could envision a time when Ganfeng controls the entirety of the Cauchari-Olaroz project.