Photo by: Reuters
PERTH (miningweekly.com) – China’s largest lithium producer Ganfeng Lithium has taken a bigger stake in the Mt Marion lithium project, in Western Australia.
ASX-listed Neometals and its joint venture (JV) partner Mineral Resources on Wednesday told shareholders in a joint statement that Ganfeng had requested to accelerate the exercise of its options to acquire an additional 18.1% interest in JV vehicle Reed Industrial Minerals, taking its shareholding in the JV to 43.1%.
In return for the sale of the 18.1% stake, Neometals would receive $27.1-million.
In September last year, Ganfeng acquired an initial 25% interest in Reed Industrial Minerals, which holds the Mt Marion project, in exchange for $19.5-million.
Following the completion of the latest transaction, Ganfeng now held a 43.1% interest in the project, while Mineral Resources held a 30% share and Neometals held a 26.9% share.
Mineral Resources has maintained its right to take its shareholding in the Mt Marion project to 43.1%. The expiry date of this call option had been linked to certain milestones at the Mt Marion project, which were expected to be achieved in the fourth quarter of this year.
A final investment decision on the Mt Marion project was taken in September last year, and first production from the mine had been earmarked for mid-2016. The project was expected to produce some 200 000 t/y of chemical grade spodumene concentrate.
Ganfeng in September also entered into a long-term offtake agreement for all spodumene product produced from the Mt Marion lithium project, at benchmarked market prices, subject to an agreed price floor.
Under the offtake agreement, from the fourth year of operations, Reed Industrial would reserve the right to take 51% of the total production if greater commercial benefit could be derived from the product.