Ganfeng Lithium has signed a new joint venture agreement with Bacanora Lithium for the Sonora Lithium Project in Mexico.
The JV agreement has been signed after Ganfeng exercised its option to increase its stake to 50% in Sonora Lithium (SLL), the holding company of the lithium project.
The China-based firm, which is also the cornerstone investor and offtake partner of Bacanora Lithium, has a stake of 22.5% in SLL.
Ganfeng will acquire the additional 27.5% stake in SLL by providing £21.8m funds to the latter. The funds will be used towards the development of the Sonora project located in northeast of Sonora State.
In October 2019, the Chinese firm had acquired 29.99% stake in Bacanora Lithium and the stake in SLL for an amount of £21.9m.
Bacanora Lithium CEO Peter Secker said: “We are pleased that Ganfeng and Bacanora have agreed terms on the updated joint venture agreements and look forward to the completion of Ganfeng’s investment to own 50% of the Sonora Lithium Project.
“As already noted, their investment further de-risks the Project and reduces the equity demands on Bacanora’s own shareholders to fund Phase 1 of the Project.
“The Sonora Lithium Project is now well placed to be in production in 2023 and delivering battery-grade lithium products into the fast-growing energy storage market.”
The closing of the parties’ new joint venture agreement will be subject to certain approvals and consents from authorities in China.
The final approval for the agreement from China’s State Administration of Foreign Exchange (SAFE) is expected in the coming weeks, said Bacanora Lithium.
The operator of the lithium project will continue to be Bacanora Lithium, a UK-based lithium development and exploration company.
On the other hand, Ganfeng will handle the engineering, procurement, and construction (EPC) activities related to the Mexican project.
According to a December 2017 feasibility study, the Sonora Lithium Project has 8.8 million tonnes of lithium carbonate (Li2CO3) equivalent resources, with a resource life of nearly 250 years.
