Power Minerals (ASX:PNN) has been granted overseas direct investment (ODI) approval for the Rincon Lithium Project joint venture in Argentina, by relevant Chinese regulatory authorities.
The ODI approval is considered a milestone for the company as it allows Power Minerals’ investment partner Navigate Energy Technology to release the US$4 million ($6.34 million) in funding.
Under the approval, investment funds are to be progressively released to the joint venture as required and directed by Power Minerals and Navigate Energy. This ensures that project funding is tied to agreed costs as the Rincon Project incurs them.
Managing Director Mena Habib says US$1 million of the funding will be used to payout the convertible loan commitment and US$400,000 to be paid to Power as consideration for the joint venture acquisition of the Pocitos Project.
“The balance of funds will be deployed for Rincon JV project development,” Habib says.
“With ODI approval granted, we are also able to move forward to finalise the incorporation of the Rincon Project joint venture company, and, once done, release funds to the joint venture and commence project development work programs.”
The Rincon Project is considered the most advanced asset within Power Minerals’ wider Salta Lithium Project located in the renowned lithium triangle of South America.
According to Trading Economics, lithium prices fell past around $16,417 per tonne in March — recording the lowest in four months amid persistent pressure from an oversupplied market.
Despite the steep decline in lithium prices, a more balanced supply and demand picture has been supported by a robust annual global growth in EV adoption, as reported by Fastmarkets.
Fastmarkets reports forecasts a rapid annual growth rate in the energy storage system sector increasing to 37% in 2025.
Power Minerals is a diversified mineral explorer focused on the discovery and development of projects in demand-driven commodities.
Write to Aaliyah Rogan at Mining.com.au
Images: Power Minerals
