Lithium Argentina and Ganfeng Lithium Group have entered a framework agreement to create a joint venture (JV) that will consolidate their lithium projects in Argentina.
The new JV, named PPG, will merge Ganfeng's Pozuelos-Pastos Grandes project with Lithium Argentina's Pastos Grandes and Sal de la Puna projects.
Ganfeng will hold a 67% stake in the venture, with Lithium Argentina owning the remaining 33%.
The current development plan aims to establish a production capacity of up to 150,000 tonnes per annum (tpa) of lithium carbonate equivalent (LCE) in three phases.
The ongoing feasibility study, expected to be completed by the end of 2025, will be used to support an application under Argentina's Incentive Regime for Large Investments (RIGI), due for submission in the first half of 2026.
It will assess the potential for both lithium carbonate and lithium chloride production, catering to the diverse needs of the battery market. The proposed hybrid flowsheet combines direct lithium extraction and solar evaporation methods to enhance scalability and efficiency.
Both partners are exploring financing avenues including offtake agreements, minority equity interests and project financing with potential customers and strategic partners.
Lithium Argentina president and CEO Sam Pigott said: “This transaction builds on our successful partnership with Ganfeng at Cauchari-Olaroz, Argentina’s largest lithium operation.
“With this transformative step forward, we are increasing our ownership into the Pozuelos basin and aligning our interests around a substantially larger-scale operation. The new JV will provide access to advanced technologies, increased financial flexibility and meaningful operating synergies. It represents an important milestone in our strategy to develop a diversified, scalable and sustainable global lithium supply chain while strengthening our balance sheet and creating lasting value for our shareholders.”
Additionally, Ganfeng has committed to providing Lithium Argentina with a $130m (932.66 yuan) six-year debt facility at a SOFR (secured overnight financing rate) plus 2.5%. This facility will bolster Lithium Argentina's financial standing, allowing for corporate debt refinancing and balance sheet strengthening.
Under the terms of the debt facility, Lithium Argentina will allocate up to 50% of its offtake from PPG's initial development phase to Ganfeng at market rates, capped at 6,000tpa of LCE.
The debt is prepayable without penalties and secured by Lithium Argentina's equity in PPG, with provisions for subordination to new corporate debt financings.
The formation of the JV is contingent upon the completion of several steps including definitive agreements, a development plan and a loan agreement for the debt facility.
These steps, along with regulatory and stock exchange approvals, are prerequisites for the JV's expected closure by the first quarter of 2026.
In December, Lithium Argentina announced its intention to relocate its corporate domicile to Switzerland, enhancing its financing capabilities and supporting its long-term growth strategy.
