Lithium Argentina and Ganfeng Forge Ahead with Pozuelos-Pastos Grandes Development

In a significant move to bolster Argentina's position in the global lithium industry, Lithium Argentina AG and Ganfeng Lithium Co. Ltd. have signed a Letter of Intent (LOI) to jointly develop the Pozuelos-Pastos Grandes (PPG) basins. This strategic partnership aims to consolidate multiple lithium projects, leveraging innovative technologies and a collaborative approach to meet the surging demand for battery-grade materials.

The PPG basins encompass Ganfeng's wholly-owned Pozuelos-Pastos Grandes project, the jointly-owned Pastos Grandes project (85% owned by Lithium Argentina and 15% by Ganfeng), and the Sal de la Puna project (65% owned by Lithium Argentina and 35% by Ganfeng). The combined capacity of these projects targets up to 150,000 tonnes per annum (tpa) of lithium carbonate equivalent (LCE), positioning the PPG initiative as a major global supplier.



The development plan is based on a phased approach, utilizing both solar evaporation and direct lithium extraction (DLE) technology. This dual-technology strategy is designed to enhance efficiency, reduce production and capital costs, and minimize the environmental footprint through lower water usage and reduced reagent requirements. A 5,000 tpa DLE demonstration plant is currently being manufactured for installation at the nearby Cauchari-Olaroz operation, with completion expected later this year. This plant will serve as a crucial proving ground for the new processing technology, potentially positioning the operation in the lower quartile of the global cost curve if successfully scaled.

The regional development plan also considers the production of lithium chloride, providing added flexibility for use in evolving battery markets. This foresight in addressing changing battery chemistry requirements demonstrates the companies' commitment to staying ahead of market trends and optimizing extraction across multiple brine sources.

The consolidation of PPG assets creates a simplified ownership structure, streamlining development decisions and capital allocation. This strategic move leverages the companies' complementary assets and expertise, potentially resulting in a larger, lower-cost operation than either could achieve independently. The partnership's capital-efficient approach, which includes exploring financing options with potential customers and strategic partners, indicates a prudent strategy in the capital-intensive lithium sector.

However, the project is not without its challenges. The success of the DLE technology is crucial, and any delays or complications in obtaining regulatory approvals could impact the project's timeline and cost estimates. Additionally, the environmental footprint of the operation must be carefully managed to comply with regulations and minimize environmental impact.

Despite these challenges, the partnership's strategic flexibility, simplified ownership structure, and established operational relationship at Cauchari-Olaroz provide a strong foundation for success. The companies' collaborative approach and innovative processing technologies position them as competitive leaders in the global lithium industry, with the potential to establish Argentina as a leader in lithium production.

In conclusion, the consolidation of lithium assets in the PPG basins by Lithium Argentina and Ganfeng represents a significant strategic move with several competitive advantages. The partnership's scale, cost efficiency, and environmental impact position it as a leader in the global lithium industry, with the potential to meet the surging demand for battery-grade materials and establish Argentina as a key player in the lithium market.