Bidders circle stake in Australian miner Galaxy's lithium project
Australian lithium miner Galaxy Resources has revealed it is weighing several offers from potential partners interested in buying a stake in its flagship Sal de Vida lithium and potash brine project in Argentina.
The ASX-listed Galaxy has been seeking to offload a stake in the project, and in August said it had shortlisted seven firms as potential strategic partners, some of which included Chinese companies, lithium end-users and businesses seeking to enter the lithium supply chain.
Galaxy’s Sal de Vida has the potential to generate revenue of around $354 million a year, scaling up to 25,000 tonnes a year of lithium carbonate and 95,000 tonnes of potassium chloride, the company has said.
In a statement to the market on Monday, Galaxy told shareholders the board had decided to extend the original timeline set in order to evaluate the multiple bids. It would proceed with a strategic partner only if the final terms of the relationship properly recognised the “fundamental underlying value of Sal de Vida and the partner can add additional value to the project”, the company said.
“Sal de Vida is recognised as one of the best undeveloped lithium resources globally,” it said.
Lithium is a a key ingredient in lithium-ion batteries, which are used in electric vehicles, electronic devices like mobile phones and laptop computers, and for storage of renewable energy. Global demand for lithium is expected to surge in coming years as electric vehicles become increasingly mainstream.
Galaxy struck a $280 million deal in August to sell a tenement at Salar del Hombre Muerto, also in Argentina’s so-called lithium triangle, to South Korean steelmaker POSCO, and said it planned to use the funds to develop Sal de Vida. The search for a development partner for the project remained a “near-term catalyst”, resources analysts said.
Galaxy on Monday said it would advise investors as the strategic process progressed, and would continue to develop the project “in the short term”.
Galaxy shares closed 2.2 per cent lower at $2.18.
Photo: Bloomberg
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