Galan Lithium has its eyes fixed on the battery future
Special Report: Galan is betting on Hombre Muerto West’s high grades and low impurities to meet its ambition of delivering battery-grade lithium carbonate.
Lithium has popped back on the radar in recent weeks thanks to the attention surrounding electric car manufacturer Tesla and its maverick boss Elon Musk during the company’s Battery Day.
Indeed, some lithium stocks drew on this attention to send their shares soaring.
But it’s the longer term prospects that have the pundits feeling excited, with several Australian lithium producers saying that the medium to long-term outlook remained attractive.
Galan Lithium (ASX:GLN) managing director Juan Pablo (JP) Vargas de la Vega agrees, telling Stockhead that while the market is quiet now, he doesn’t think that it will remain so for long.
And that is good news for Galan, which is focused on developing its Hombre Muerto West project in Argentina’s Hombre Muerto salar (salt flat), the world’s second best salar for the production of lithium from brines after the Atacama salar in Chile.
“We have a fantastic project that combines something not commonly found in lithium, which is high-grade, low impurity brines.” Vargas de la Vega said.
“The most exciting thing is that Hombre Muerto West already has an inventory of about 1.4 million tonnes lithium carbonate equivalent (LCE) at about 946 mg/l Li.
“This inventory has enabled us to commence project studies and we now expect to have the preliminary economic assessment (PEA)/scoping study released by the end of this quarter.”
The PEA will generate engineering, operating cost and capital cost estimates required to support scoping studies for the production of battery and/or technical grade lithium carbonate.
And there is potential for more development as Galan currently has a combined total inventory of 2.06 million tonnes lithium carbonate equivalent at 826 mg/l Li at its Hombre Muerto West and Candelas projects.
Significant exploration upside is also likely at its unexplored concessions at Hombre Muerto West
Geophysical surveys at the Santa Barbara and Catalina projects have already confirmed “very conductive and shallow horizons that are consistent with geological units saturated with brine”.
Resistivity values from the targets are similar to those at Galan’s Pata Pila and Rana de sal permits, which is a positive for their lithium grade potential.
Galan has sent off a 3 cubic metre brine sample to Universidad Catolica del Norte in Antofagasta, Chile, for lab testing.
The detailed analysis is expected to solidify the project’s optimised brine quality of 4.8 per cent lithium.
Current modelling shows that the Hombre Muerto West lithium grade concentrate of its brine is more than competitive for the production of battery-grade lithium carbonate.
“We are doing numerous tests at a benchtop level .The aim is to confirm that we can produce high-grade lithium concentrate in brines, and hopefully, battery-grade lithium carbonate production.”
Galan has every reason to be confident.
Livent Corporation’s Fenix operation at Hombre Muerto has been in production for more than 27 years.
It produced about 17,000t of lithium carbonate and 4,000t of lithium chloride in 2019.
South Korean steel-maker POSCO has also clued into the region’s potential and farmed into Galaxy Resources’ (ASX:GXY) Sal De Vida deposit, which is currently undergoing design work and piloting.
Infrastructure including sealed roads, processing water and power are already in place.
Vargas de la Vega is also confident about the company’s options for selling lithium products, noting that Hombre Muerto West’s location allows it to sell to North America, Europe and China.
“Unlike Australian spodumene producers, we are not locked in to just one country or one geographical location for our products, so we can place this in many ways,” he explained.
Galan is also open to exploring alternatives to producing lithium carbonate.
“When you produce lithium concentrate in brine, you can then produce carbonate and intermediate products. Beyond that, you couldalso think about producing hydroxide, which is a bit more complex but still a possibility,” Vargas de la Vega added.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.