Australian lithium miner Firefinch and China’s Ganfeng Lithium have taken the final investment decision (FID) for the Goulamina Lithium Project in the Ségou region of southern-central Mali.

The FID comes despite increased estimated capital cost for the first phase of the project from $194m to $255m.

The first phase of the Goulamina project involves the production of 2.3 million tonnes per annum (Mtpa).

This project is a 50:50 joint venture between Firefinch and Ganfeng.

The increased capital is related to having the flexibility to expand to have a 4Mtpa capacity in the second stage.

For the purpose of project funding, Ganfeng agreed to either provide a $40m loan or arrange third-party debt of up to $120m, marking an increase from an initial bank debt financing agreement of up to $64m.

Firefinch said that site-based activities and early-stage engineering works are underway to accelerate the project development.

According to the updated definitive feasibility study, which was completed in December 2021, the project is expected to have a pre-tax Net Present Value (NPV) of A$4.1bn and 83% of a post-tax real rate of return.

The original definitive feasibility study was completed in October 2020.

Firefinch managing director Dr Michael Anderson said: “The approval of FID represents yet another major milestone for the Goulamina Project.

“Clearly the outcomes of the DFS Update have been extremely compelling to the boards of both companies and it is a testimony to the project’s credentials that the partners have moved so quickly and collaboratively to commit to the development of Goulamina.”

In February 2021, Firefinch announced its plans to demerge Goulamina into a new separate lithium focused ASX-listed entity named Leo Lithium.