SQM Expands Operations into Africa with $40 Million Deal in Namibia

SQM has received approval for a $40 million agreement with Andrada Mining in Namibia to develop the Lithium Ridge asset. This venture marks SQM’s first partnership in Africa, with plans to enhance project development and economic growth in the region. Andrada will continue as the project operator and may receive additional fees based on lithium resource success.

Chile’s SQM (NYSE: SQM), the second-largest lithium producer globally, has secured approval from regulators in Namibia to pursue an earn-in agreement valued at up to $40 million with Andrada Mining, based in South Africa. This partnership represents SQM’s inaugural foray into the African market and aims to expedite the development of the Lithium Ridge project, situated approximately 35 kilometers from Andrada’s prominent Uis tin mine.

Under the terms of this agreement, SQM is granted the option to acquire a stake of up to 50% in Grace Simba Investments (GSI), Andrada’s subsidiary holding the Lithium Ridge license. Anthony Viljoen, the CEO of Andrada, stated that this approval marks the essential step needed to embark on what promises to be a transformative partnership.

Viljoen further remarked on the broader implications of the agreement, noting that SQM’s significant investment of $40 million could act as a catalyst for both the project’s advancement and economic development in the lithium-abundant Erongo region. Although Andrada Mining will maintain its role as the project operator, it is set to receive a success fee contingent upon the lithium resources exceeding 40 million tonnes.

Andrada’s stock experienced a decline of 2.4%, closing at £2.03 ($2.56) in London on Friday, resulting in a market capitalization of $43.7 million. The shares have fluctuated within a 52-week range from $2.39 to $6.98.

In conclusion, SQM’s partnership with Andrada Mining marks a significant milestone as it embarks on its first venture in Africa. The $40 million investment is anticipated to facilitate the development of the Lithium Ridge project while stimulating economic growth in the Erongo region. As the project operator, Andrada will benefit further if substantial lithium resources are confirmed.

Original Source: www.northernminer.com