ARGENTINA — Galan Lithium (ASX: GLN) has achieved a significant milestone in its lithium development journey, securing a full Phase 2 mining permit for its wholly-owned Hombre Muerto West lithium brine project in Argentina.
The permit, granted by the Catamarca Ministro – Ministerio de Mineria, paves the way for the construction of essential infrastructure, including ponds, a processing plant, and an onsite laboratory.
This development sets the stage for Galan to ramp up production to 21,000 tonnes per annum (tpa) of lithium carbonate equivalent (LCE), following the initial Phase 1 production of up to 5,400 tpa.
Galan managing director Juan Pablo (JP) Vargas de la Vega said the mining permit comes at a time of positive lithium economics.
“This permit will allow us to increase production over threefold from Phase 1 and produce a premium quality lithium chloride product which is in high demand,” he said.
“Importantly, it positions Hombre Muerto West in the first quartile of the cost curve and ensures that Phase 2 production will be cash flow positive even at today’s prevailing lithium carbonate prices.”
“This permit will allow us to increase production over threefold from Phase 1 and produce a premium quality lithium chloride product which is in high demand,” Vargas de la Vega stated.
The company’s phased development strategy aims to establish Hombre Muerto West as a long-term, resilient source of lithium supply with global significance.
Galan’s immediate focus remains on finalising finance and offtake arrangements for Phase 1, after which construction will commence, leading to the first production of lithium chloride concentrate.
Galan’s Chairman Richard Homsany highlighted the importance of the company’s strong relationships with the Government of Catamarca and local communities in securing the Phase 2 permit.
“We have demonstrated the benefits of our operations economically through the generation of employment, procurement and trade opportunities and socially through education, community programs and training opportunities,” Homsany explained.
The Phase 2 permit also bolsters Galan’s application for the Argentinian Régimen de Incentivo para Grandes Inversiones (RIGI), a new incentive regime for large-scale investments.
This could potentially provide Galan with significant financial benefits, including a lower corporate income tax rate and concessions on various taxes and duties.
As Galan Lithium progresses with its Hombre Muerto West project, the company is poised to become a significant player in the global lithium market, contributing to the growing demand for lithium in the electric vehicle and renewable energy storage sectors.
