Chile’s SQM has secured a $40 million earn-in agreement with Andrada Mining to develop the Lithium Ridge asset in Namibia, marking its first venture into Africa. The agreement allows SQM to obtain a stake in Andrada’s subsidiary while promising economic benefits for the local region. Andrada remains the project operator and may receive a fee if lithium resources exceed 40 million tonnes.
Chile’s SQM (NYSE: SQM), recognized as the world’s second-largest lithium producer, has obtained necessary approvals from regulators in Namibia to execute an earn-in agreement valued at up to $40 million with the South Africa-based Andrada Mining (LSE: ATM). This joint venture aims to develop the Lithium Ridge asset, marking SQM’s inaugural partnership in Africa.
This strategic agreement is projected to expedite the advancement of the Lithium Ridge project, situated approximately 35 kilometers from Andrada’s prominent Uis tin mine. The terms of the agreement grant SQM the option to acquire a stake of up to 50% in Grace Simba Investments (GSI), Andrada’s subsidiary that holds the licensing rights for Lithium Ridge.
Andrada CEO Anthony Viljoen remarked, “This approval is the final component required for us to fully launch what will be a transformative partnership.” He highlighted the significance of SQM’s investment, indicating it would serve as a catalyst for increased project development and stimulate economic growth within the lithium-rich Erongo region.
Andrada Mining will continue its role as the operator of the project and is entitled to a success fee should the lithium resource exceed 40 million tonnes. Following the announcement, Andrada’s stock experienced a decline of 2.4%, trading at £2.03 ($2.56) in London, which reflects a market capitalization of $43.7 million. Over the past year, shares have fluctuated between $2.39 and $6.98.
In conclusion, SQM’s foray into Africa through a strategic $40 million agreement with Andrada Mining underscored the potential for enhanced lithium resource development in Namibia. This partnership not only aims to bolster economic prospects in the Erongo region but also positions SQM to leverage significant growth opportunities in the African lithium market.
Original Source: www.northernminer.com
