China's Ganfeng Lithium, one of the world's biggest lithium producers, said on Monday it had signed an initial deal to explore setting up a plant to make lithium batteries in Argentina's northwestern Jujuy province.
Lithium is a key ingredient in rechargeable batteries for electric vehicles. While best known as a producer of lithium chemicals, which it supplies to automakers including Tesla, Ganfeng has a subsidiary that makes lithium batteries and battery sales last year made up 23.1% of its total revenue.
The non-binding memorandum - inked with Argentina's Ministry of Productive Development and the Jujuy provincial government on Friday - will see Ganfeng consider making a move downstream in one of the countries where it has acquired interests in lithium resources.
Ganfeng is developing the Cauchari-Olaroz lithium brine project in Jujuy, which partner Lithium Americas said in a presentation this month was targeting first production of battery-quality lithium carbonate in mid-2022.
The parties also agreed to look at the viability of joint development of projects as well as investment opportunities in lithium exploration and extraction, a statement from the Argentinian ministry said.
"We want to support the industrial development of Argentina to make it one of the most important lithium-producing countries in the world," Ganfeng Chairman Li Liangbin said in that statement.
Ganfeng is also pursuing a lithium brine project in Argentina's Salta province, near Jujuy, and expects to this year receive the environmental assessment permit needed to start construction.