Australian lithium developer Galaxy Resources has signed an agreement to acquire joint-venture partner General Mining for A$216m ($155m).

The deal will create a global lithium producer for continued project expansion, development and further opportunities.

It will have a geographically diversified portfolio of hard rock and brine based lithium projects in Australia, Canada and Argentina.

The assets include Mt Cattlin in Western Australia, Sal De Vida project in Argentina and James Bay Project in Canada.

"Our ability to capture future growth opportunities in the rapidly evolving lithium market will be significantly enhanced by this merger."

Pro forma market capitalisation of merged entity is expected to be more than A$700m ($502m).

Galaxy Resources chairman Martin Rowley said: "We are extremely pleased that the joint venture arrangement we entered into with General Mining in 2015 has resulted in a merger proposal that makes sound strategic sense and, importantly, gives the shareholders of both Galaxy and General Mining the opportunity to participate in the upside of a merged lithium company of global significance.

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"The arrangement struck between Galaxy and General Mining has enabled the recommissioning of the Mt Cattlin mine, drawing on General Mining’s financial and technical resources, with Mt Cattlin now poised to deliver first production of spodumene to contracted buyers in the third quarter of calendar 2016."

General Mining chairman Michael Fotios, said: "Both companies have successful track records of creating substantial value for shareholders and, together, we will retain this focus.

"Our ability to capture future growth opportunities in the rapidly evolving lithium market will be significantly enhanced by this merger."

Once the deal has been completed, General Mining will become a wholly owned subsidiary of Galaxy.