China's Ganfeng Lithium Co said on Monday it would spend $160-million to boost its ownership stake in an Argentina lithium project with Lithium Americas, part of a plan to solidify its access to the white metal used to make electric vehicle batteries.
The deal, which must still be approved by shareholders, will see Ganfeng boost its ownership in a joint venture that controls the Argentina project to 50% from 37.5%.
The cash will be used to further develop the project, known as Cauchari-Olaroz, both companies said.
"This further cements our partnership with Ganfeng," Jon Evans, Lithium Americas' president, told Reuters. "Our single goal is to get this into production."
Lithium Americas is "very comfortable" with the 50:50 joint venture split and does not expect to sell more of its ownership stake, Evans said.
The pair also said they would study how to eventually boost the project's output of lithium from 25 000 t/y to 40 000 t/y. The project is slated to start production in 2020.
For Lithium Americas, the deal is a vote of confidence in its management team and development of the lithium-rich brine deposit in Argentina's far north, near similar operations under development by Neo Lithium Corp and Advantage Lithium.
The cash infusion helps Lithium Americas closer to its goal of being Argentina's largest producer of the white metal, ahead of Orocobre and Livent Corp, the nation's two existing lithium producers.
For Ganfeng, the project further guarantees its access to lithium as the company eyes ways to expand its dominance over the electric vehicle battery supply chain. Ganfeng supplies lithium to Tesla Inc and LG Chem.
Shares of Vancouver-based Lithium Americas rose 10.5% to C$5.59 in Toronto trading on Monday. Ganfeng shares rose 5% to 28.98 yuan in Shanghai trading on Monday.
Lithium Americas is also developing a lithium project in Nevada, though executives have prioritised the Argentina joint venture with Ganfeng.
The battle to supply minerals to electric vehicles is intensifying rapidly across the globe, with investors and producers jockeying for access to key supplies.
Elsewhere on Monday, eCobalt Solutions Inc, which is developing a cobalt project in Idaho, said it would merge with Australia's Jervois Mining.