JOHANNESBURG (miningweekly.com) – As demand for lithium grows, Aim-listed Obtala Resources has committed to investing $1,6-million to acquire a controlling stake in a company that holds two lithium exploration projects, in Argentina.
Obtala on Monday reported that it had acquired an 80% stake in Renholn Holdings, which held the Arizaro and Catamarca exploration projects in north-west Argentina, from Red Sea Resources for an initial $325 000.
Two further payments of $500 000 in cash or Renholn shares and $750 000 in cash or Renholn shares would be due in February 2011 and August 2011, respectively.
The lithium market has been growing at between 4% and 5% a year in recent years, with demand set to reach 100 000 t/y of lithium carbonate equivalent by this year, stated Obtala.
Demand for lithium, which is used in lithium-ion batteries, was particularly being driven by the uptake in electric vehicles and industrial scale batteries, the resources company added.
Obtala would aim to rapidly develop an at surface lithium recovery operation from the prospective potassium-rich brine mineralisation, for export purposes.
“The objective is to develop a low capex surface plant that can produce lithium for significantly higher margins than equivalent hard rock resources. Due to the demand drivers predicated from battery and electric car manufacturing we believe there is a significant opportunity for lithium producers to create strategic partnerships, especially in Asia, with automotive manufactures to ensure supply chain integrity,” Obtala chairperson Frank Scolaro commented in a statement to shareholders.
Renholn would start with a surface pitting and sampling work programme on the two exploration projects, which covered a combined 33 917 ha area, in November to identify and prioritise certain drill targets.
The exploration programme, which would cost about $300 000, would entail the sampling of surface waters and shallow sub-surface waters.
Delineation drilling would then start in the first quarter of next year.
A geological consultancy has been appointed to oversee the exploration work.
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