Canada’s Ultra Lithium and Zangge Mining have pledged $290m towards the Laguna Verde brine lithium project in the Catamarca province in Argentina.

The announcement was made by the Argentinean Minister of Industry Daniel Scioli on Twitter.

The two firms initially plan to invest $40m in the exploration and development of the lithium deposits at the project.

A further $250m would be invested at a later stage to fund the construction of a lithium carbonate processing plant.

The Laguna Verde brine lithium project is 100% owned by Ultra Lithium, through its subsidiary Ultra Argentina.

Last month, Ultra Lithium agreed to divest a 65% stake in its subsidiary Ultra Argentina to Zangge Mining, a lithium and potassium producer owned by China-based Zangge Mining Investment (Chengdu).

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By GlobalData

According to the agreed terms, Zangge has to pay $10m to Ultra Lithium and make an investment of $40m in the Argentine brine lithium project as work expenditures.

The Laguna Verde comprises a new high-grade lithium discovery spread over three mining licences covering an area of 7,569ha.

It is located to the north of Salar de Antofalla and is owned by Ultra Lithium and Albemarle.

Based on exploratory sampling carried out by Ultra Lithium in the past, the Laguna Verde deposit holds lithium values in the range of 34.2-1,270 milligrams per litre (mg/l) or parts per million (ppm), magnesium values under 1ppm-7,920 ppm, potassium 804ppm-15,800ppm, and boron 65ppm-2,190ppm.

Over the next five years, the Argentinean Government anticipates investments of $4.2bn in its lithium market, according to Mining.com.

This could lead to a two-fold growth in the country’s lithium production in 2023 and reach 175,000t in 2025.