Galan inks government deal for lithium sales in Argentina

Galan Lithium (ASX:GLN) has signed a commercial agreement with the Catamarca Government in Argentina to enable the commercialisation of lithium chloride concentrate from the Hombre Muerto West (HMW) Project. 

The agreement contemplates both the domestic sale and international export of concentrate and is expected to facilitate access to a larger customer base, potentially offering enhanced offtake terms, and funding or prepayment opportunities. 

Galan, which has a market capitalisation of $136.6 million, says the agreement includes an increase in a proposed royalty rate to 7%, and potential advance payments similar to those already in place in Australia. 

The HMW project sits in Argentina’s Hombre Muerto Salar and is expected to produce a low-cost premium lithium chloride concentrate of 6% lithium, comparable to 13% lithium oxide or 32% lithium carbonate equivalent. HMW is on track for first production in the first half of 2025.   

Under the agreement, Galan will pursue further downstream processing routes outside of the Hombre Muerto salar after a four-year period, with the intent to offer priority to a collaboration with a Catamarca Government agency. 

According to Galan, the agreement also cements a prerequisite required for the grant of phase two permits, which are currently under application. 

Galan Managing Director Juan Pablo Vargas de la Vega says the agreement with the Catamarca Government is part of the company’s strategy of becoming Argentina’s next lithium producer.    

“This commercial agreement is an important milestone in implementing Galan’s strategy, providing access to a larger international customer base at potentially improved sales and funding/prepayment terms,” he says. 

“We are proud of our long-term relationship with the Government of Catamarca and local communities in Argentina. 

“The agreement reflects the mutual respect and trust we have established and the commitment we all have to maximising the short, medium and long term economic opportunities at the HMW Project.”

Galan Lithium is a lithium explorer and developer with two lithium brine projects in the Hombre Muerto Salar in Argentina, within South America’s ‘lithium triangle’, as well as the Greenbushes South Lithium project in Western Australia. 

Write to Adam Drought at Mining.com.au

Images: Galan Lithium
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Written By Adam Drought
Born and raised in the UK, Adam is a sports fanatic with an interest in Rugby League and UFC/MMA. When not training in Muay Thai and Brazilian Jiu Jitsu, Adam attends Griffith University where he is completing his final year of a Communication & Journalism degree.