Galan Lithium has secured a full phase two mining permit for its Hombre Muerto West (HMW) lithium brine project in Argentina from the Catamarca Ministro – Ministerio de Mineria.
The move allows the company to boost production to 21,000tpa of LCE at the project.
This is contingent upon arranging project financing and after the commencement of phase one, which is expected to produce up to 5,400tpa of LCE.
Galan said the phase two permit bolsters its application for the country’s new incentive regime for large-scale investments, Argentinian Régimen de Incentivo para Grandes Inversiones (RIGI).
If eligible for the RIGI, Galan could benefit from a reduced corporate income tax rate of 25% (down from the standard 35%), accelerated depreciation, no time limits on tax loss carry-forwards, and various import duty, VAT and withholding tax concessions.
The regime also offers increased flexibility regarding foreign exchange movements and fiscal stability.
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By GlobalData
Galan managing director Juan Pablo Vargas de la Vega said: “We are delighted with the grant of the Phase 2 mining permit which continues to solidify our strong relationship with the local Catamarcan authorities. It will allow Galan to increase production over threefold from Phase 1 and produce a premium quality lithium chloride product, which is in high demand.
“Importantly, HMW is positioned in the first quartile of the cost curve and Phase 2 production would be cash flow positive even at today’s prevailing lithium carbonate prices. HMW is now poised to be a long term and resilient globally significant source of lithium supply.”
The HMW project is divided into four production stages, with the first phase’s definitive feasibility study (DFS) focusing on 5,400tpa LCE of lithium chloride concentrate and production projected to start in the second half of 2025.
The phase two DFS aims for a medium-term output of 21,000tpa of LCE in 2026. The third phase of HMW is designed to reach 40,000tpa of LCE by 2028.
The fourth phase has a more extended target of 60,000tpa of LCE, utilising lithium brine from both HMW and Galan’s Candelas project in Argentina, by 2030.
In April 2024, Galan signed a commercial agreement with the Catamarca Government in Argentina to allow lithium chloride concentrate commercialisation from the HMW project.
