As Chinese companies continue making efforts to strengthen their global foothold in the critical minerals market, Argentina has stood out as an appealing investment opportunity.
The Asian battery component manufacturer Changyuan New Growth Resources (CNGR) Advanced Material Co Ltd (SHE: 300919) just toured a series of properties hosting valuable lithium deposits in the nation’s Salta and Catamarca provinces. Building on a previous lithium investment this year, the company is now preparing financing for an even greater stake in the Lithium Triangle.
CNGR is not new to the industry in South America. At the end of April, the Chinese manufacturer agreed to buy a 90 per cent stake in Jujuy’s Solaroz project run by Lithium Energy Limited (ASX: LEL) for C$88.3 million.
The company, which listed on the Shenzhen Stock Exchange at the end of 2020, is also known to have a significant supply agreement with Tesla (Nasdaq: TSLA).
Furthermore, CNGR is one of the largest producers of battery precursor substances made from nickel, cobalt and sodium electrolyte materials. Earlier this month, the company’s Indonesian subsidiary became a certified nickel supplier for the London Metal Exchange.
⚒️🇦🇷 CNGR Advanced Material, un fabricante chino de componentes de baterías y proveedor de Tesla, quiere adquirir más proyectos de litio en Argentina, luego de adquirir el proyecto jujeño Solaroz en abril pasado.https://t.co/ot0UQ1UJfA
— Cristian Geo (@CristianGeo7) June 3, 2024
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Investors take keen interest in other Salta site
Lithium South Development Corporation (TSX-V: LIS) (OTCQB: LISMF) (Frankfurt: OGPQ) just gave a tour to some prospective investors at its Hombre Muerto North operation in the Salta province too.
Representatives from a potential partner company were on-site for three days getting to know the project, and others have shown an interest in the lithium brine resource as well.
The visit followed the company securing a C$3 million private placement in mid-May. Hombre Muerto North is worth nearly C$1.3 billion and will have a 31.6 per cent internal rate of return during its lifespan.
It too has attracted interest from major Asian chemical companies, such as Posco Holdings Inc (KRX: 005490), which is jointly developing certain sections of the property with Lithium South.
In other related news, the Argentine Chamber of Mining Companies just rejected a proposal to increase mining royalties provided to the nation’s provincial governments by 5 per cent. This is positive for companies like CNGR and Lithium South.
Lithium South Development Corporation is a sponsor of Mugglehead news coverage
rowan@mugglehead.com
