Australia-listed Galan Lithium announced a new offtake prepayment memorandum of understanding (MoU) with China’s Chengdu Chemphys Chemical Industry.
This agreement comes after the company confirmed that its previously announced deal with Glencore will not proceed.
Under the MoU, Galan will supply Chemphys with a total of 23,000 tons of lithium carbonate-equivalent (LCE) over the first five years of Phase 1 production from its Hombre Muerto West (HMW) project in Argentina. Chemphys will provide Galan with a $40-million offtake prepayment facility to support the development of Phase 1.
Galan’s Managing Director, JP Vargas de la Vega, highlighted that the high-grade, low-impurity lithium chloride samples from the HMW pilot plant have been well received by lithium converters. Chemphys, a prominent lithium processor in China, is a trusted partner of major battery manufacturers.
Regarding the previous agreement with Glencore, Galan stated that it did not receive the expected offtake and financing prepayment proposal.
The proposed deal, announced last November, would have included a $70-million to $100-million prepayment facility and the supply of 100% of HMW’s Stage 1 production of 5,400 tons of LCE.
