SQM to focus on Chile, Australia lithium projects

Chilean lithium producer SQM is to focus its efforts on lithium brine project expansions in Chile and developing its hard rock lithium joint venture with Kidman Resources in Australia.

SQM has agreed to sell its 50pc stake in Argentina-focused Minera Exar to China's Ganfeng Lithium for $87.5mn as part of its strategy to focus its future activity on Chile and Australia. Minera Exar owns the Cauchari-Olaroz project in Argentina's Jujuy province, expected to start production in 2020.

As part of its sales agreement with Ganfeng Lithium, SQM and its subsidiary SQM Potasio will also receive a deferred payment of $50mn based on certain lithium sales targets achieved at Cauchari-Olaroz.

SQM said it expects to almost quadruple is capacity in Chile "in the coming years". It sees significant production potential in Australia where its is a 50pc partner in the Mount Holland project, which is developing the Earl Grey deposit and considering setting up a downstream lithium chemical plant outside Perth in Western Australia (WA).

Earl Grey has a mineral resource of 128mn t grading 1.44pc lithium oxide containing around 1.84mn t of metal. Lithium concentrate will be produced at Earl Grey before being beneficiated at the proposed refinery site.

SQM and Kidman Resources have selected the site for a proposed downstream refinery to produce lithium hydroxide and carbonate in WA. Their jointly owned partnership entity Western Australia Lithium has entered into an option agreement to lease a development site within the Kwinana Strategic Industrial Area near Perth.

A definitive feasibility study on the refinery is expected to be completed by the end of 2018. If it is positive, it is expected that a downstream plant will be commissioned in 2021 with nameplate production capacity of 44,000 t/yr of lithium hydroxide or 37,000 t/yr of lithium carbonate. Kidman maintains the right to participate in up to 50pc of the refinery investment and market its share of the refinery's production.