Triple Flag Precious Metals announced that it will purchase a 0.5% gross overriding revenue royalty on the Tres Quebradas lithium project in northern Argentina for $28 million. The deal, which involves Lithium Royalty Corp, signals Triple Flag’s strategic move into the lithium market, as the company looks to diversify its portfolio and capitalize on the growing demand for battery metals.

The Tres Quebradas project is located in Catamarca province, is a lithium brine operation fully owned by China’s Zijin Mining. The project is fully permitted and is expected to begin production in the second half of 2025. It has a nameplate capacity of 20,000 tonnes of battery-grade lithium carbonate per year in its first stage. There is potential for significant expansion, with a second phase that could raise production to between 40,000 and 60,000 tonnes of lithium carbonate annually, depending on Zijin’s decisions.

Triple Flag’s acquisition comes amid rising global interest in lithium, a critical component for electric vehicle (EV) batteries. Although the lithium market has recently seen a drop in prices due to oversupply, analysts still forecast strong long-term demand as electric vehicle adoption continues to grow. The transaction is set to close in the first quarter of 2025, providing Triple Flag with exposure to a large-scale, well-capitalized project that is expected to offer significant upside potential over the long term.

Triple Flag CEO Sheldon Vanderkooy emphasized that while the company’s primary focus remains on precious metals, the acquisition of the Tres Quebradas royalty presents a unique opportunity to deploy capital in a counter-cyclical manner, securing exposure to a major lithium asset with promising long-term returns. He described the project as “a large, well-capitalized mining project with a long life and significant upside potential at attractive returns.”

Tres Quebradas has indicated resources of approximately 5.4 million tonnes of lithium carbonate equivalent (LCE) and inferred resources of nearly 2.3 million tonnes LCE. The project’s robust resource base positions it as a key player in Argentina’s burgeoning lithium sector, which is one of the largest in the world.

Zijin Mining acquired Tres Quebradas from Neo Lithium Corp. in early 2022 for $770 million and has since invested over $600 million in the project, underscoring its commitment to developing the asset. The project is seen as a significant contributor to Argentina's position as one of the top lithium producers globally.

Triple Flag’s move into lithium follows in the footsteps of other mining giants, such as Rio Tinto, which made headlines in October with its $6.7 billion acquisition of Arcadium Lithium, a company with brine operations in Argentina.