SQM Ventures into African Market with $40 Million Lithium Partnership in Namibia

SQM has entered into a $40 million earn-in agreement with Andrada Mining to develop the Lithium Ridge asset in Namibia. This partnership marks SQM’s first expansion into Africa and aims to facilitate the project’s development while contributing to economic growth in the Erongo region. Andrada will operate the project and is eligible for a success fee if lithium resources exceed 40 million tonnes.

Chile’s Sociedad Química y Minera de Chile (SQM), recognized as the second largest lithium producer globally, has secured authorization from regulators in Namibia to pursue a significant earn-in agreement with South Africa-based Andrada Mining. This agreement, valued at up to $40 million, aims to co-develop the Lithium Ridge asset, marking SQM’s inaugural entry into the African market.

The Lithium Ridge project is strategically located approximately 35 kilometers from Andrada Mining’s flagship Uis tin mine, and the new partnership is anticipated to expedite its development. Under the terms of the agreement, SQM may acquire up to a 50% interest in Grace Simba Investments, which is Andrada’s subsidiary responsible for holding the Lithium Ridge license.

Andrada Mining’s CEO, Anthony Viljoen, expressed satisfaction with the approval, stating, “This approval is the final component required for us to fully launch what will be a transformative partnership.” He further remarked on the significance of the financial commitment, indicating that SQM’s investment could serve as a substantial driver for both the project’s advancement and economic prosperity in the lithium-rich Erongo region.

As the project operator, Andrada Mining stands to gain a success fee should the identified lithium resource surpass 40 million tonnes. Following this announcement, Andrada’s share price saw a decline of 2.4% to £2.03 ($2.56), giving the company a market capitalization of approximately $43.7 million; its shares have fluctuated between $2.39 and $6.98 over the past year.

The partnership between SQM and Andrada Mining represents a significant milestone for both companies, particularly SQM’s first endeavor in Africa. The $40 million investment is poised to accelerate the development of the Lithium Ridge project and stimulate economic growth in the region. This collaboration could potentially unlock new opportunities in the lithium market, enhancing both companies’ positions within the industry.

Original Source: www.northernminer.com