Lithium Argentina AG. today announced a significant step towards expanding its lithium production capacity in Argentina through a Letter of Intent (LOI) with Ganfeng Lithium Co. Ltd. The two companies plan to jointly develop the highly prospective Pozuelos-Pastos Grandes (PPG) basins, consolidating their existing projects in the region to create a large-scale, low-cost lithium operation.

The PPG project encompasses Ganfeng’s wholly-owned Pozuelos-Pastos Grandes project, the jointly-owned Pastos Grandes project (85% Lithium Argentina, 15% Ganfeng), and the Sal de la Puna project (65% Lithium Argentina, 35% Ganfeng). This strategic consolidation aims to unlock substantial synergies and establish Argentina as a leading force in the global lithium industry, catering to the burgeoning demand from the battery market.

Sam Pigott, President and CEO of Lithium Argentina, expressed his enthusiasm for this development, stating, “Following the successful ramp-up at the Cauchari-Olaroz lithium operation over the past year, we are excited to build on our experience and strengthen our proven partnership model to support these growth plans. Our ongoing efforts to finalize the regional development plan at PPG are encouraging and should present a compelling, low-cost solution to help meet future battery market demand.”

The LOI outlines a framework for the two companies to finalize a comprehensive regional development plan for the combined resources within the PPG basins. The development strategy envisions a phased approach that integrates both conventional solar evaporation techniques and innovative direct lithium extraction (DLE) technology. This hybrid approach aims for a significant combined production capacity targeting up to 150,000 tonnes per annum (tpa) of lithium carbonate equivalent (LCE). Furthermore, the plan includes the potential production of lithium chloride, offering added flexibility to cater to diverse battery market requirements.

The integration of these projects is expected to yield considerable operational and cost efficiencies compared to developing each project independently. By leveraging shared infrastructure and optimizing resource utilization, the joint venture aims to create a larger and significantly lower-cost operation.

In a parallel effort to enhance processing capabilities, a 5,000 tpa DLE demonstration plant is currently under construction for installation at the nearby Cauchari-Olaroz lithium operation, which is also jointly managed by Lithium Argentina and Ganfeng. Expected to be completed later this year, this demonstration plant is crucial for validating the DLE technology for potential deployment at the PPG project. The implementation of DLE is anticipated to result in improved efficiencies, lower overall production and capital costs, and a reduced environmental footprint through decreased water usage and reagent consumption.

To finance this ambitious undertaking, Ganfeng and Lithium Argentina are actively exploring various options, including collaborations with potential customers and strategic partners for offtake agreements and potential minority ownership stakes.