Background on Lithium Chile and Argentum Lithium
Lithium Chile, a Canadian company, has entered into a definitive agreement to sell its Argentine subsidiary, Argentum Lithium, to China Union Holdings for $175 million. This transaction highlights the increasing Chinese interest in acquiring strategic assets in Argentina, specifically within the lithium mining sector.
Key Details of the Agreement
The deal, announced from Calgary, involves the transfer of ownership of one of Argentina’s largest salt flat projects—the Arizaro lithium project in Salta Province. Argentum Lithium, which controls key interests in the Arizaro salt flat, will be fully acquired by China Union Holdings. This project has an annual production capacity of 25,000 tonnes of battery-grade lithium and already has resource estimates, preliminary economic assessments, and prefeasibility studies.
Conditions for Closing the Deal
Although the agreement has been finalized, its closure is subject to certain preconditions. Argentum Lithium must acquire an additional 17.8% stake in ARLI S.A., the company holding the mining rights to the Arizaro salt flat, raising its ownership to 80%.
Perspectives from Lithium Chile and China Union Holdings
Steve Cochrane, CEO of Lithium Chile, described the transaction as a milestone that allows the company to “crystallize value” in Argentina and free up capital for its Chilean portfolio, which encompasses over 106,000 hectares. For China Union Holdings, the appeal is clear: gaining access to a developed project with limited geological risk and high development potential in one of the world’s top lithium-rich countries.
China’s Expanding Presence in Argentine Mining
Chinese investment in Argentina’s mining sector has been growing through companies like Ganfeng Lithium and Zijin Mining, which have expanded their investments in various minerals. The strategic objective is to secure long-term lithium supply for a rapidly growing battery and electric vehicle industry.
Key Questions and Answers
- Who are the main parties involved in this agreement? Lithium Chile, a Canadian company, and China Union Holdings are the key parties in this transaction.
- What is the value of the agreement? The deal is valued at $175 million.
- Which lithium project is being transferred? The Arizaro lithium project in Salta Province, Argentina.
- What is the annual production capacity of the Arizaro project? The project has an annual production capacity of 25,000 tonnes of battery-grade lithium.
- Why is China increasing its presence in Argentine mining? To secure long-term lithium supply for the growing battery and electric vehicle industry.
