Australia’s miner Leo Lithium Ltd (ASX: LLL) has decided to sell its 40 per cent stake in Mali’s Goulamina lithium project over perceived security risks in the country and other factors.
The Chinese chemical producer Ganfeng Lithium (SHE: 002460), a joint venture (JV) partner in the operation since 2022, will take Leo’s ownership share for C$468.5 million. As a result, Ganfeng will have a 90 per cent stake in Goulamina once the deal is finalized.
Leo says that increasingly challenging sovereign and security risks in Mali, the economic impact of the new Malian Mining Code implemented last year and its current financial position were the factors that led to the sale. The ASX-listed operator believes it is in the best interest of its shareholders.
The new code implemented by Mali’s government in 2023 gives the country the right to take a 10 per cent stake in domestic mining projects. The African nation also has the option to acquire an additional 20 per cent within two years of commercial production. This may lessen Ganfeng’s ownership.
Goulamina is one of the world’s largest undeveloped hard rock lithium deposits. The operation is on schedule to produce its first spodumene concentrate in Q3 this year.
“The board believes that the transactions are in line with the company’s strategy of upstream and downstream integration and the further development in the new energy vehicle industry sector,” Ganfeng said in a Hong Kong stock exchange filing on Tuesday. China has the world’s largest market for electric vehicles.
“It will also further strengthen the company’s control over Mali Lithium [Leo and Ganfeng JV company], secure supply of lithium resources, facilitate the business expansion of the company and enhance its core competitiveness.”
La mine d'or Morila au Mali est transférée à l'État malien pour un dollar symbolique après 20 ans d'exploitation par Firefinch. La vente résout un différend impliquant Firefinch, Leo Lithium et Ganfeng Lithium sur la propriété de la mine de lithium Goulamina. Ganfeng versera 60… pic.twitter.com/fSrsgW982x
— 𝐇𝐢𝐬𝐭𝐨𝐢𝐫𝐞𝐬 𝐝'𝐀𝐟𝐫𝐢𝐪𝐮𝐞 ♤ (@Silboyofficiell) May 9, 2024
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Ganfeng invests in Argentina lithium too
In addition to Africa, Ganfeng has allocated significant capital into Argentina’s section of the rich Lithium Triangle to help fulfil chemical demands.
The company just invested C$95.7 million in the Pastos Grandes operation run by Lithium Americas (Argentina) Corp. (TSX: LAAC), thereby acquiring a 15 per cent stake.
The Salta province where the project resides is home to many lithium operators. Lithium South Development Corporation (TSX-V: LIS) (OTCQB: LISMF) (Frankfurt: OGPQ) is currently developing its C$1.27 billion Hombre Muerto North resource there in partnership with POSCO Holdings (NYSE: PKX).
POSCO just secured a major loan for the continued development of its Sal de Oro operation spread between the Salta and Catamarca provinces.
Meanwhile, the major multinational miner Rio Tinto Group (ASX: RIO) (LON: RIO) continues to develop Salta’s Rincon lithium project. The company agreed to invest over C$478 million into its plant this March.
Lithium South Development Corporation is a sponsor of Mugglehead news coverage
rowan@mugglehead.com
