On the heels of a brand new memorandum of understanding (MOU) for a possible offtake deal, Galan Lithium (ASX:GLN) Managing Director Juan Pablo Vargas de la Vega has expressed confidence in a “very sturdy” future for lithium.
On August 26, Galan signed an MOU with Chinese language battery producer Chengdu Chemphys Chemical Business for an offtake prepayment settlement. As soon as a definitive deal is reached, Chemphys will buy a complete of 23,000 tonnes of lithium carbonate equal, as a lithium chloride product, over the primary 5 years of Part 1 manufacturing from Galan’s Hombre Muerto West venture in Argentina. The Chinese language agency may also present Galan with a prepayment facility of US$40 million for the offtake.
“It tells you that the long run future for lithium and the main battle revolution that we’re seeing could be very sturdy,” de la Vega instructed the Investing Information Community.
“Once you have a look at the converters, they’re in enlargement mode, the battery makers are in enlargement mode as a result of they’ve to produce lithium to the battery converters. This tells you a narrative that China is hungry for additional feed, and this feedstock, in our view, will not be sufficient in the long run. So what has to provide is value. Value will come again,” he stated.
“I can’t inform precisely when that is going to occur — whether or not it is three months, six months, 12 months … and by the point we begin coming to manufacturing, we consider that we’ll be in a special pricing setting, and we’ll be set to begin taking the rewards from all of the arduous work that we have been doing all these years to grow to be a producer,” de la Vega added.
Galan is in a robust place to additionally look into Part II and take manufacturing from 5,000 tonnes as much as 21,000 tonnes, he added. Galan is on observe to start manufacturing at its Hombre Muerto West venture in 2025.
Watch the total interview with Galan Lithium Managing Director Juan Pablo Vargas de la Vega above.
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