China pCAM producer CNGR could take over the Solaroz Lithium Brine Project in Argentina

Battery materials exploration company Lithium Energy has reached an agreement to sell its 90% stake in the Solaroz Lithium Brine Project in Argentina to CNGR Netherlands New Energy Technology B.V., a subsidiary of the China-based CNGR Advanced Material. The sale is valued at approximately US$63 million.

Located in the Olaroz Salar, Solaroz has a close proximity to the brine projects and facilities controlled by Arcadium Lithium and Lithium Argentina. According to Lithium Energy, the project has a JORC Indicated and Inferred Mineral Resource Estimate (MRE) of 3.3Mt of LCE, within which 1.3Mt is a high-grade core with an average concentration of 400 mg/l lithium. A scoping study was conducted in late 2023.

The project’s Direct Lithium Extraction (DLE) evaluation is progressing through an agreement with Xi’an Lanshen New Material Technology who has also agreed to construct a battery grade lithium plant at Solaroz capable of producing 3,000 tonnes of lithium carbonate per annum.

The decision to sell, as disclosed by Lithium Energy in the press release, mainly comes from adverse lithium market conditions and the substantial financial requirements needed for development. This explains why it is CNGR, being one of the biggest producers of precursors cathode active materials (pCAM) in the battery supply chain, taking over the project.

The transaction involves a US$1.8 million deposit by CNGR, with the balance payable upon completion, including a deferred payment contingent on future lithium carbonate prices exceeding US$23,000 per tonne. Completion of the sale is also contingent to shareholder approval and regulatory clearances in China and Argentina, expected within six months from the agreement date, targeting a Q4 2024 finalisation.

Author: Hongqiu Su | Battery Metals Analyst Associate | London Office, Shanghai Metals Market
Email: lilysu@smm.cn