The share price of Ganfeng Lithium Co Ltd dropped by 1.1% on Tuesday – before finishing 0.7% down at the close in Shenzhen – after its announcement on Monday it will acquire Argentina’s Lithea Inc for $962 million.
China’s largest lithium compounds maker Ganfeng hopes to use the takeover to scale up its production of important battery metals, as demand surges due to the rapid expansion of the electric vehicle market.
Privately owned Lithea owns rights to two lithium salt lakes in Argentina’s mineral-rich Salta province.
Last year, global lithium production jumped 21%, powered by spiking demand for industry-standard lithium-ion batteries, according to data from the US Geological Survey (USGS).
Argentina, part of the so-called “lithium triangle”, has been trying to attract more investors with new mining infrastructure and tax cuts.
Rio Tinto said in December it would buy the Rincon lithium project in Argentina’s Salta province for $825 million as the global miner builds its battery materials business.
United States-based Lithium Americas Corp also has a lithium project in the same area.
- Reuters, with additional editing from Alfie Habershon