The Conversation (0)
Offtake Deal with Chemphys Signals Strong Future for Lithium, Galan Lithium Exec Says
Sep. 05, 2024 01:00PM PST
Lithium Investing“There's a big concern about where lithium (is) going … But the strong message that we want to tell the market is that we believe that this is a short-term view … the long-term future for lithium and the lithium battery revolution that we are seeing is very strong,” said Galan Lithium Managing Director Juan Pablo Vargas de la Vega.
On the heels of a new memorandum of understanding (MOU) for a potential offtake deal, Galan Lithium (ASX:GLN) Managing Director Juan Pablo Vargas de la Vega has expressed confidence in a “very strong” future for lithium.
On August 26, Galan signed an MOU with Chinese battery producer Chengdu Chemphys Chemical Industry for an offtake prepayment agreement. Once a definitive deal is reached, Chemphys will purchase a total of 23,000 tonnes of lithium carbonate equivalent, as a lithium chloride product, over the first five years of Phase 1 production from Galan’s Hombre Muerto West project in Argentina. The Chinese firm will also provide Galan with a prepayment facility of US$40 million for the offtake.
“It tells you that the long-term future for lithium and the lithium battery revolution that we are seeing is very strong,” de la Vega told the Investing News Network.
“When you look at the converters, they’re in expansion mode, the battery makers are in expansion mode because they have to supply lithium to the battery converters. This tells you a story that China is hungry for further feed, and this feedstock, in our view, won't be enough in the long term. So what has to give is price. Price will come back," he said.
"I cannot tell exactly when that's going to happen — whether it's three months, six months, 12 months … and by the time we start coming to production, we believe that we'll be in a different pricing environment, and we'll be set to start taking the rewards from all the hard work that we've been doing all these years to become a producer," de la Vega added.
Galan is in a strong position to also look into Phase II and take production from 5,000 tonnes up to 21,000 tonnes, he added. Galan is on track to begin production at its Hombre Muerto West project in 2025.
Watch the full interview with Galan Lithium Managing Director Juan Pablo Vargas de la Vega above.
Disclaimer: This interview is sponsored by Galan Lithium (ASX:GLN). This interview provides information which was sourced by the Investing News Network (INN) and approved by Galan Lithium in order to help investors learn more about the company. Galan Lithium is a client of INN. The company’s campaign fees pay for INN to create and update this interview.
INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.
The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with Galan Lithium and seek advice from a qualified investment advisor.
This interview may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, receipt of property titles, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The issuer relies upon litigation protection for forward-looking statements. Investing in companies comes with uncertainties as market values can fluctuate.
GLN:AU
