By: ICN Bureau
Last updated : March 06, 2018 8:18 pm
The JV will go into effect following a capital contribution of US$25 million by SQM in exchange for a 50 per cent ownership stake in Minera Exar, a wholly owned subsidiary of LAC.
Lithium Americas Corp. (LAC) has entered into a definitive agreement with Sociedad Química y Minera de Chile to form a 50/50 joint venture on the Cauchari-Olaroz lithium project in Jujuy, Argentina.
The JV will go into effect following a capital contribution of US$25 million by SQM in exchange for a 50 per cent ownership stake in Minera Exar, a wholly owned subsidiary of LAC. SQM's contribution includes US$15 million to repay intercompany loans between Minera Exar and LAC; the remaining US$10 million will be allocated to project development.
SQM and LAC intend to immediately advance a work and engineering plan, which contemplates completion of an updated definitive feasibility study based on an existing study for Cauchari that was completed by Minera Exar in 2012. The updated study will evaluate economic feasibility for a project with a nameplate production capacity of approximately 40,000 metric tons per year of lithium carbonate equivalent. Depending on the results of the study, the project may be executed in stages.
Tom Hodgson, Chief Executive Officer of LAC, commented, "SQM is the world leader in lithium production with decades of development and operating experience and a strong team of technical and commercial talent. It also has a track record of success as a partner in many global joint ventures. One of the principal objectives of the Joint Venture is to leverage the technical experience of SQM to materially de-risk the development of Cauchari-Olaroz and to successfully advance the project to bring new supply to the market on a timely basis. Lithium plays an important strategic role in the energy revolution and it is critical that our industry respond by delivering more supply to meet increasing demand."
Patricio de Solminihac, Chief Executive Officer of SQM, commented, "SQM is committed to the lithium business, both in Chile and abroad. The Salar de Caucharí is a great complement to our existing lithium operations in Chile, and it is located just a few hundred kilometers from the Salar de Atacama. We expect to have similar production processes at both sites, and as a result we should benefit from operating synergies."
de Solminihac continued, "We are confident that this joint venture will generate value for our shareholders. We believe that SQM's years of experience in the lithium business, and our vast distribution network, combined with LAC's knowledge of the Salar de Caucharí and its stakeholders, will prove to be key advantages that will contribute to the success of this project."