From Stock head, note comments from CFO Andrew Phillips.
Lithium Power International (ASX:LPI) has landed itself a pretty sweet deal with Chile’s largest copper miner, state-owned Codelco.
Codelco is one of the largest copper producers in the world, making $US14.3 billion ($21 billion) in revenue last year.
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During its nearly five decades of operation, Codelco has produced more than 59 million tons of copper and it currently has close to 18,000 employees.
Codelco also owns a big portion of the Maricunga Salar (salt lake) in Chile and now plans to combine its assets with Lithium Power’s Maricunga project.
The news propelled shares up nearly 12 per cent to 38c on Friday morning.
Lithium Power says its Maricunga project is Chile’s highest grade and most advanced lithium project outside the Salar de Atacama — the world’s richest lithium deposit.
And CFO Andrew Phillips told * Codelco isn’t as advanced on its landholding as Lithium Power is.
“They’ve got a team of people on the salar now, but they’re way behind where we are and it made sense that we would join together,” he said.
“In rough kind of dimensions, we own a quarter, [Codelco] own about a quarter and there’s another quarter owned by SQM, and the final quarter is owned by a number of smaller players.
“We’ve known Codelco for a long, long time and we’ve been working through with them on that for the last eight months.”
Lithium Power and Codelco have inked an MoU that will pave the way for the creation of a new joint venture.
Lithium Power has a 51 per cent stake in the Maricunga project via its joint venture company Minera Salar Blanco (MSB).
The two companies still have to nut out the details of the partnership, but Phillips said it would not be an equal split.
“It won’t be 50/50, it will be some kind of ratio, but I’m not going to say what it is at this stage,” he told *.
Lithium Power CEO Cristobal Garcia-Huidobro said the public-private alliance would allow the joint venture to become the third lithium producer in Chile.
“This JV would allow for a very robust and scalable project, and would also fast-track LPI’s flagship Maricunga development, including provision of all the necessary permits,” he said.
“It would include Codelco’s key CEOL contract and the Nuclear Commission permit covering the entire salar, which would complement the expected approval of MSB’s EIA [environmental impact assessment] before year-end.
“This means there will be certainty regarding the permitting of the project.”
Lithium Power’s goal is to start construction in the first half of 2020. A definitive feasibility study completed earlier this year indicated Maricunga would be able to produce 20,000 tonnes of lithium carbonate equivalent each year over 20 years.
