Lithium Argentina has signed definitive agreements with Ganfeng to establish a joint venture (PPG JV) consolidating the Pozuelos-Pastos Grandes lithium projects (PPG) in Salta Province.
As part of the arrangement, Ganfeng will invest $180m in Lithium Argentina through a six-year unsecured convertible note.
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Ganfeng and Lithium Argentina will hold 67% and 33% interests, respectively, in the JV.
The project targets annual lithium carbonate equivalent production of 150,000t across three phases using shared infrastructure and resources.
The convertible note carries a 4% coupon and allows Ganfeng to convert the instrument into Lithium Argentina common shares at $12.50 per share.
Proceeds from the investment, combined with existing cash, are earmarked to repay in full Lithium Argentina’s $259m (390.96bn pesos) convertible debt due January 2027, extending the company’s maturity profile on an unsecured basis and altering its debt structure.
The newly formed PPG JV brings together Ganfeng’s Pozuelos-Pastos Grandes project and Lithium Argentina’s Pastos Grandes and Sal de la Puna projects, consolidating them into a single basin-wide development initiative.
Under the terms, major decisions, project funding above $20m per year and development plans will require joint approval.
Ganfeng’s team in Salta will operate the venture.
Both partners will fund the operation in proportion to their ownership stakes and retain offtake rights according to these interests.
Historical investments in the consolidated assets amount to $1.8bn.
Completion of the JV is expected in September 2026.
Upon closing, the projects are due to be consolidated under Millennial Lithium, a Dutch company.
Ganfeng currently owns around 9.6% of Lithium Argentina’s outstanding shares.
Lithium Argentina CEO Sam Pigott said: “These transactions strengthen our balance sheet and minimise dilution for our shareholders, while positioning both Cauchari-Olaroz and PPG to deliver significant value.
“At Cauchari-Olaroz, with over $300m of liquidity at the operation, access to low-cost financing and substantial free cash flow generation, we are strongly positioned to fund the Stage 2 expansion organically and accelerate our growth plans.”
The closing of the investment is subject to customary approvals from the Toronto Stock Exchange and New York Stock Exchange.
