Sociedad Química y Minera (SQM) has received Namibian regulatory approval for a $40 million earn-in agreement with Andrada Mining to co-develop the Lithium Ridge asset. This marks SQM’s first venture into Africa. The arrangement allows SQM to potentially own up to 50% of Grace Simba Investments. The investment is poised to promote economic development in the Erongo region.
Chile’s Sociedad Química y Minera (SQM), recognized as the world’s second-largest lithium producer, has secured approval from regulatory authorities in Namibia to engage in an earning agreement valued at up to $40 million with Andrada Mining, a South Africa-based company, to collaboratively develop the Lithium Ridge asset. This partnership represents SQM’s inaugural venture in Africa, anticipated to enhance the project’s development, strategically located approximately 35 kilometers from Andrada’s prominent Uis tin mine.
As part of the agreement, SQM has the opportunity to acquire a stake of up to 50% in Grace Simba Investments (GSI), the subsidiary of Andrada that possesses the Lithium Ridge license. Andrada Mining’s Chief Executive Officer, Anthony Viljoen, expressed his enthusiasm about the approval, indicating that it is crucial for the launch of what he describes as a transformative partnership.
Mr. Viljoen further articulated the broader implications of the investment, stating that SQM’s proposed capital injection of up to $40 million would serve as a catalyst for both the development of the project and the economic growth in Namibia’s lithium-rich Erongo region. Additionally, Andrada Mining will maintain its role as the project’s operator and will earn a success fee if the lithium resource is determined to exceed 40 million tonnes.
In recent trading, Andrada Mining’s shares experienced a decline of 2.4%, settling at £2.03 ($2.56) each, which translates to a total market capitalization of approximately $43.7 million. The share price has ranged between $2.39 and $6.98 over the past 52 weeks.
In summary, SQM’s partnership with Andrada Mining represents a significant advancement for lithium development in Namibia, allowing both companies to leverage their strengths and resources effectively. The approval of the earn-in agreement, along with the potential for economic growth in the Erongo region, highlights the strategic importance of this collaboration in the expanding lithium market. The partnership not only aims at resource development but also emphasizes the potential for regional economic benefits.
Original Source: www.northernminer.com
