Ganfeng Lithium has acquired a stake in Lithium Americas’ Pastos Grandes lithium project in Salta, Argentina, by subscribing to up to $70m (503.95m yuan) worth of new shares.

In this regard, Lithium Argentina reached a definitive agreement with a Ganfeng Lithium subsidiary.

This capital infusion is poised to grant Ganfeng Lithium a nearly 15% interest in Proyecto Pastos Grandes S.A. (PGCo), the indirect wholly owned subsidiary of Lithium Americas that holds the project.

The Pastos Grandes project, situated in the same basin as the Sal de la Puna project, is adjacent to Ganfeng Lithium’s PPG project and lies 100km from the operational Caucharí-Olaroz project, a joint venture between Lithium Americas and Ganfeng Lithium.

In collaboration with Lithium Americas, Ganfeng Lithium will commence the preparation of a regional development plan for the Pastos Grandes Basin and PPG.

The plan is expected to be completed by the end of 2024.

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Additionally, the two companies are exploring the potential benefits of incorporating Ganfeng Lithium’s direct lithium extraction technology into the existing conventional solar evaporation process at Pastos Grandes.

The proceeds from the investment will be allocated to further the development of Lithium Americas’ lithium projects in Argentina.

Currently, the offtake rights for PGCo remain uncommitted. Lithium Americas is actively seeking new customers and financing options to expedite and bolster the development of a global lithium chemical supply chain.

The deal awaits regulatory approvals and is expected to be finalised in the second quarter of 2024.

Upon completion of the transaction, Ganfeng Lithium will be entitled to an additional interest of up to 1.6% in PGCo, contingent on the results of an independent resource estimation process.

Lithium Americas (Argentina) executive chairman, president and interim CEO John Kanellitsas said: “The transaction with Ganfeng Lithium demonstrates our long-term commitment to Salta and the sustainable development of Argentina’s lithium industry.

“While we continue to prioritise the ramp-up at Caucharí-Olaroz, already among the largest lithium brine operations in Argentina, the transaction further strengthens our balance sheet and enhances our growth plans by leveraging our existing teams and nearby operations.”