Chile’s SQM, the second-largest lithium producer, has received Namibian regulatory approval to establish a partnership with Andrada Mining to jointly develop the Lithium Ridge asset. The deal offers SQM a potential 50% stake in the project, which is situated near Andrada’s Uis tin mine, and represents SQM’s first foray into the African market. SQM’s investment is expected to catalyze economic growth in the Erongo region.
Chile’s SQM (NYSE: SQM), recognized as the world’s second-largest lithium producer, has gained approval from regulators in Namibia to initiate an earn-in agreement with South Africa’s Andrada Mining (LON: ATM). This partnership will focus on the joint development of the Lithium Ridge asset, which is strategically located approximately 35 kilometers from Andrada’s primary Uis tin mine. Under the terms of the agreement, SQM can acquire as much as a 50% interest in Grace Simba Investments, the subsidiary of Andrada that possesses the Lithium Ridge license.
Andrada Mining’s CEO, Anthony Viljoen, remarked that obtaining this approval represents a crucial step for launching what he refers to as a transformative partnership. He indicated that SQM’s anticipated investment of up to $40 million would serve as a significant stimulus for the development of the project and would also bolster economic growth within the lithium-rich Erongo region of Namibia.
The role of Andrada Mining will remain as the project operator, ensuring that they manage the development processes. Notably, there is an established clause in the agreement dictating that Andrada Mining will be entitled to a success fee in the event that the lithium resource surpasses 40 million tonnes, highlighting the potential for substantial resource discovery and economic benefit.
In conclusion, SQM’s entry into the Namibian lithium sector through a partnership with Andrada Mining marks a significant milestone as it represents SQM’s inaugural venture into Africa. The approved agreement is set to accelerate the development of the Lithium Ridge asset, with a substantial financial investment anticipated to foster local economic growth and establish a framework for future collaboration in lithium production.
Original Source: www.mining.com
