Ganfeng Lithium Signs Agreement for 150,000-Ton Annual Lithium Project in Argentina

en.Wedoany.com Reported - On August 24, Ganfeng Lithium and Lithium Argentina signed a definitive agreement to form a PPG joint venture in Salta Province, Argentina, integrating three adjacent lithium brine projects and establishing a production system targeting an annual output of 150,000 tons of lithium carbonate equivalent under a three-phase development plan. Ganfeng Lithium will hold 67% equity in the joint venture, while Lithium Argentina will hold 33%, with the transaction expected to close in September.

The joint venture assets include Ganfeng Lithium's Pozuelos-Pastos Grandes project, as well as Lithium Argentina's Pastos Grandes and Sal de la Puna projects. Upon closing, the relevant projects will be consolidated under Dutch holding company Millennial Lithium B.V., with operations managed by Ganfeng Lithium's team in Salta Province. Major matters such as development plans, financing, and budgets require mutual consent from both parties, and offtake rights will be allocated in proportion to shareholding.

The cumulative historical investment in the acquisition and development of the three assets amounts to approximately $1.8 billion. Phase 1 of Pozuelos-Pastos Grandes received its environmental impact statement in November 2025, with an approved capacity of 50,000 tons of lithium carbonate per year; the remaining capacity will be advanced through two subsequent phases, with the combined three-phase target set at 150,000 tons of lithium carbonate equivalent annually. The project plans to adopt a process combining solar evaporation with direct lithium extraction.

The joint venture has applied in the first quarter of 2026 for inclusion of the full 150,000-ton capacity plan under Argentina's Large Investment Incentive Scheme, and Lithium Argentina expects the relevant application to be processed by the end of the year. Both parties are also advancing project-level debt financing and considering the introduction of minority strategic investors; annual project contributions exceeding $20 million require joint approval from both shareholders.

Concurrent with the joint venture agreement, GFL International, a wholly-owned subsidiary of Ganfeng Lithium, signed an agreement to subscribe for $180 million in six-year unsecured convertible bonds issued by Lithium Argentina using its own funds. The bonds carry an annual interest rate of 4%, with an initial conversion price of $12.50 per share, and are expected to mature in 2032.

Lithium Argentina plans to use the bond proceeds, together with existing cash, to repay $259 million in convertible debt maturing in January 2027. If Ganfeng Lithium fully converts the bonds, approximately 14.4 million new shares would be issued, and its fully diluted stake in Lithium Argentina is expected to increase from approximately 9.6% to approximately 16.1%. The convertible bond transaction is scheduled to close in September, subject to approval conditions from the Toronto Stock Exchange, the New York Stock Exchange, and other regulatory bodies.