Asia expanding foothold in LatAm lithium sector

By
Wednesday, July 5, 2017

Asian companies are seeking to increase their foothold in Latin America's lithium mining sector.

Chinese and Japanese firms are among those lining up for a stake in operations in Chile, Argentina, Bolivia and Mexico, with demand from electric car battery producers forecast to soar.

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SQM

Chile's SQM is the latest lithium miner targeted by Asian investors, with China's GSR Capital eyeing a 20% stake, worth about US$1.9bn currently, Reuters reports, citing two unnamed sources.

SQM is among the world's biggest lithium producers, with assets in northern Chile.

The company has been in the sights of Chinese companies in recent years, with Tianqui Lithium and Shanshan among those reportedly interested in a previous proposed sale of a minority stake.

SQM plans to boost lithium carbonate production in Chile by an additional 15,000t/y to 63,000t/y to meet growing global demand, it said in May.

Chile was the world's second biggest lithium producer in 2016, at 12,000t, behind Australia's 14,300t.

CAUCHARI-OLAROZ

China also secured a key stake in Argentina's Cauchari-Olaroz lithium project, pictured, a 50:50 JV between SQM and Lithium Americas, in June.

As a result of a US$172mn financing deal, Jianxi Ganfeng Lithium has become Lithium Americas' single largest shareholder, with a 19.7% stake in the company.

The US$425mn project is expected to produce 25,000t/y lithium, with initial output in 2019, before an expansion aimed at doubling output.

BOLIVIA

Chinese and South Korean companies were among the bidders to construct Bolivia's US$900mn Salar de Uyuni lithium carbonate plant.

Bolivia's government plans to organize a new bidding process after none of the 26 proposals met its requirements in May.

The project is expected to produce 50,000t/y lithium, in addition to potassium chloride and magnesium chloride.

MEXICO

In Mexico, London and Canada-listed Bacanora Minerals entered a strategic partnership with Japan's Hanwa in April.

Under the deal, Hanwa acquired a 10% stake in Bacanora and signed an off-take agreement for up to 100% of battery grade lithium carbonate produced at the Sonora lithium project.

Bacanora plans to produce 17,500t/y lithium carbonate at Sonora, with production starting in 2019, before doubling output after two years.

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OUTLOOK

With Chile and Argentina ranking among the world's top producers, and Bolivia and Mexico potential future players, Asian involvement in Latin American lithium production is likely to step up as electric car development accelerates.