Rio’s renewed interest in SQM is welcome by the Chilean government, which had expressed concerns about a potential and dangerous concentration in the market should major lithium producers, such as China’s Tianqi, acquire the 32% interest in SQM.
Tesla and SQM were exploring opportunities after Tesla expressed interest in buying "important volumes" of lithium hydroxide from SQM.
At least seven holes totalling 1500 metres are planned at the Ontario-based project.
The deal frees the miner to apply for increase in production quota amid demand boom and surging prices for lithium, which is used in EV batteries.
Decision doesn’t mean the miner has abandoned plans to capitalize on the electric-car boom, sources familiar with the matter say.
The Falkenhain deposit, in the German state of Saxony, is located about 5 km from another Bacanora asset in Germany — the 50%-owned Zinnwald lithium project.
The bulk of new capacity would come online in 2019.
There is a powerful economic tail-wind in play right now. Battery technology and prices are continuing to get cheaper, Solar, wind, and batteries are all getting more affordable and as technology improves the energy metals look increasingly promising.
New acquisition would increase the Canadian company's holdings in Salta to 8,664 hectares.
The penny stock surged 250 percent in October when both the price of lithium and a benchmark of producers posted single-digit returns.