On the evening of December 15, Ganfeng Lithium (002460) announced that its wholly-owned subsidiary, Ganfeng International, held a commissioning ceremony for Phase I of the Goulamina spodumene project in Mali, Africa, marking the official commencement of operations for Phase I of the project.
According to the announcement, the Goulamina spodumene project is located in southern Mali, Africa, and is one of the largest lithium mines in Africa. The mining area covers approximately 100 square kilometers, with currently explored ore resources totaling about 211 million mt, corresponding to lithium resources of approximately 7.14 million mt LCE, with an average lithium oxide grade of 1.37%.
Phase I of the Goulamina spodumene project is planned to have an annual capacity of 506,000 mt of lithium concentrate, while Phase II is expected to expand its annual capacity to 1 million mt of lithium concentrate.
Ganfeng Lithium stated that the commissioning of Phase I of the Goulamina spodumene project provides the company with a stable and high-quality lithium resource supply channel, ensuring resource security for its lithium chemicals production lines. This is expected to enhance the company's lithium resource self-sufficiency rate, improve profitability, and positively impact its future operational performance.
It is worth noting that on the evening of December 5, Ganfeng Lithium announced that its board of directors had approved a proposal allowing its wholly-owned subsidiary, Ganfeng International, and Lithium du Mali SA (LMSA) to sign a "Share Transfer Agreement" with the Republic of Mali ("Mali").
Under the agreement, the Malian government will acquire a 35% equity stake in LMSA. Of this, 10% will be granted free of charge in accordance with Mali's mining laws, while the remaining 25% will be purchased for a transaction price of 20 billion West African CFA francs (approximately $32 million). This amount will be repaid through dividends received by the Malian government from LMSA during the validity period of the mining license. The Malian government has committed to using 20% of the dividends corresponding to its 35% stake annually to repay the aforementioned amount. Additionally, the Malian government has agreed to provide a 2% tax reduction on the ISCP (specific product tax) for LMSA, exemptions and special arrangements under the local content laws for the mining supply chain, and to approve exemptions or relaxations on a case-by-case basis as per LMSA's applications. Furthermore, the Malian government will provide policy support for the development and operation of Phase II of the Goulamina spodumene project and assist the company in advancing its construction.
Upon completion of the Malian government's equity participation, Ganfeng Lithium will indirectly hold a 65% stake in LMSA, while the Malian government will hold 35%. The company's control and operational rights over LMSA will remain unchanged. The tax incentives and government support granted by the Malian government will create a stable and favorable administrative and business environment for the company's local investments, providing strong support and positive impacts for the development of Phase II of the Goulamina spodumene project and other projects.
It is reported that in addition to the Goulamina spodumene project, Ganfeng Lithium's Cauchari-Olaroz lithium salt lake project in Argentina is progressing smoothly in its capacity ramp-up, having reached approximately 80% capacity utilisation rate. The Mariana lithium salt lake project is expected to begin trial operations by the end of this year, with capacity ramp-up planned for next year.
Regarding the future trend of lithium prices, Ganfeng Lithium recently stated that lithium carbonate prices have been highly volatile due to changes in market supply and demand. The company remains optimistic about medium and long-term demand in the lithium industry and expects lithium carbonate prices to gradually return to a reasonable range. Currently, lithium prices are still at a low point and may maintain a fluctuating trend next year. However, several mines in Australia have gradually reduced or ceased production due to lithium ore prices reaching cost pressure levels. The company anticipates that the supply-demand relationship will improve next year, making it unlikely for lithium prices to continue declining significantly from a fundamental perspective. From a global perspective, domestic demand growth appears relatively more certain, while overseas demand faces uncertainties due to factors such as the Russia-Ukraine war and the US presidential election transition.
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