Chile’s SQM has secured regulatory approval for a $40 million earn-in agreement with Andrada Mining to develop the Lithium Ridge asset in Namibia, marking its first partnership in Africa. SQM may acquire up to 50% of Andrada’s subsidiary holding the mining license, and the investment is expected to stimulate regional economic growth.
Chile’s SQM (NYSE: SQM), recognized as the world’s second largest lithium producer, has been granted regulatory approval in Namibia to initiate a significant earn-in agreement valued at up to $40 million. This partnership with South African company Andrada Mining (LSE: ATM) will focus on the collaborative development of the Lithium Ridge asset, a strategic location close to Andrada’s Uis tin mine, approximately 35 km away.
This venture represents SQM’s inaugural engagement in the African market and is anticipated to expedite the project’s development. Within the framework of this agreement, SQM retains the option to acquire up to a 50% interest in Grace Simba Investments (GSI), which is the subsidiary of Andrada that holds the Lithium Ridge license.
Andrada Mining’s CEO, Anthony Viljoen, stated, “This approval is the final component required for us to fully launch what will be a transformative partnership.” He emphasized the significance of SQM’s investment as a pivotal factor for fostering both project advancement and economic development in the lithium-rich Erongo region.
As the operator of the project, Andrada Mining will be entitled to a success fee should the lithium resource surpass an impressive 40 million tonnes. Following this announcement, Andrada’s shares experienced a decline of 2.4%, trading at £2.03 ($2.56) in London, resulting in a market capitalization totaling $43.7 million, with shares exhibiting a 52-week range of $2.39 to $6.98.
In summary, SQM’s partnership with Andrada Mining marks a significant milestone in the lithium industry, potentially transforming the landscape in Namibia’s Erongo region. With SQM’s substantial investment and strategic acquisition options, this project is poised for growth, which could contribute positively to both the local economy and the global lithium supply chain.
Original Source: www.northernminer.com
