Canada’s Ultra, China’s Zangge Join Forces for Argentina Lithium Project

Ultra Argentina SRL, subsidiary of Vancouver based Ultra Lithium, and China’s Zangge Mining have committed investments totaling $290 million to explore and develop lithium deposits in northwest Argentina, and to build a plant. The Chinese company will initially invest $40 million for the exploration and development of the Laguna Verde project. The remaining $250 million investment is planned at a later date for the construction of a lithium carbonate processing plant.

Ultra and Zangge signed a definitive association agreement last month for the Laguna Verde lithium project. As part of the deal, Zangge will pay Ultra Lithium $10 million, and invest $40 million in the project for a 65% stake in Ultra Argentina, a fully owned subsidiary of the Canadian company.

Argentina is located in the so called “lithium traingle” with neighbors Chile and Bolivia. The region is estimated to hold 56% of the world’s lithium. This means Argentina has the potential to become the world’s third or fourth biggest producer of the battery metal.

The government expects to receive a $4.2 billion combined investment regarding lithium over the next five years. It would help Argentina to double production in 2023, and reach 175,000 tonnes in 2025.

The Latin American nation has already attracted major players over the past year including the world’s second largest miner Rio Tinto and South Korean steelmaker Posco.

The nation’s lithium portfolio includes 23 projects in various stages of development, including the Cauchari-Olaroz project under development by Ganfeng Lithium and Lithium Americas. It is expected to become the country’s top producer with 40,000 tonnes of lithium carbonate equivalent per year, starting from the second half of 2022.

Australia’s Orocobre and US miner Livent, which have supply tie-ups with Toyota and BMW respectively, operate the only two producing lithium mines in the country.

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