Bacanora, Ganfeng Reach New Agreement on Sonora Lithium ProjectBy Paloma Duran | Thu, 02/04/2021 - 10:46
Bacanora Lithium announced that the company and its investor and partner Ganfeng Lithium have signed a joint venture agreement for investment in Sonora Lithium Ltd (SLL). The agreement includes the of increasing Ganfeng’s stake from 22.5 percent to 50 percent. Additionally, the Sonora project is expected to start production in 2023.
Bacanora was granted the Sonora project concessions in 2010 and published its bankable feasibility study eight years later. In 2019, Ganfeng became a shareholder and signed a 50 percent off-take agreement. The project has recently gained public attention for holding one of the world's most significant lithium deposits. “We will commence initial site works at Sonora in 1H21, subject to completion of financing, which would enable commencement of production at the plant in 2023,” said CEO Peter Secker, according to a previous MBN article.
The Sonora project is considered one of the world’s largest lithium deposits. It has “a Measured plus Indicated Mineral Resource estimate of over 5Mt of lithium carbonate equivalent and an additional Inferred Mineral Resource of 3.7Mt of LCE,” reported mining.com. According to the company’s feasibility study, the Sonora project has “8.8 million tons of lithium carbonate equivalent resources, with a resource life of nearly 250 years.”
The approval of the agreement by Chinese authorities and the payment of US$29.9 million are still required for Ganfeng to have 50 percent ownership of the Sonora project. The payment will be used to drive its development, which is expected to position Mexico as an important lithium producer of 17,500t/d of battery-grade lithium carbonate.
Bacanora has updated the expected cost for Stage 1 from US$420 million to US$407 million. However, the company has estimated an additional US$37 million for various works in the project. Together with Ganfeng, the companies expect production to increase to 35,000t/d during Stage 2, which will require an investment of US$380 million.
The agreement approval from China’s State Administration of Foreign Exchange (SAFE) is expected to be obtained in the coming weeks. According to NS Energy, the operator of the project will be Bacanora Lithium, while Ganfeng will oversee engineering, procurement and construction activities.
Secker told MBN that lithium demand will continue to grow between 15 and 20 percent until 2025. After that year, renewable energies will start to play a larger role in demand as their presence in the market continues to grow. As a result, the world will need large grid storage lithium-based batteries.