Diversified natural resources company Glencore has entered into a lithium chloride concentrate offtake agreement with Australia- and Frankfurt-listed Galan Lithium and has offered to provide or facilitate a secured financing prepayment facility for $70-million to $100-million.
Under the terms of the offtake agreement, Glencore will buy technical-grade lithium chloride product from Galan’s high-grade, low-impurity Hombre Muerto West (HMW) project in the Catamarca province, Argentina.
The offtake commitment does not require Galan to have secured an export licence for its lithium chloride. Glencore will accept offtake for Galan’s lithium chloride to be toll treated into lithium carbonate for sale and export from Argentina.
The binding agreement is for a five-year period from the start of commercial production of Galan’s Phase 1 development at HMW, which is estimated at 5 400 t/y of lithium carbonate equivalent.
Construction of Phase 1 of the HMW mine started in September. It is expected to start production in the first half of 2025.
The proposed financing prepayment facility is aimed at supporting the Phase 1 development at HMW.
“The agreement with Glencore is a validation of the quality of our world-class project and endorses the calibre and experience of Galan’s team. Our agreement with Glencore significantly de-risks our project and we are very well poised to secure finance for Phase 1 of the HMW project.
"Importantly, Glencore’s funding assistance via the prepayment facility endorses our lithium chloride concentration strategy to deliver the HMW project, and provide returns to shareholders, in a shorter timeframe," Galan MD Juan Pable Vargas de la Vega says.