Galan Lithium Secures Permit for Phase 2 Expansion at Hombre Muerto West Project

Hombre Muerto West

Galan Lithium has received a significant boost for its Hombre Muerto West (HMW) project in Catamarca, Argentina, with the granting of a Phase 2 mining permit by the Argentinian Ministry for Mining. This approval paves the way for a substantial increase in lithium production capacity at the brine project.

Production Expansion and Strategic Advantages

The Phase 2 permit allows Galan Lithium to ramp up nameplate capacity at HMW to 21,000 tonnes per year, a significant expansion from its Phase 1 production.  "We are delighted with the grant of the Phase 2 mining permit," said Juan Pablo Vargas de la Vega, Galan's managing director. "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."

The company currently holds an inventory of approximately 6,000 tonnes of lithium contained in existing lithium ponds at HMW and aims to commence Phase 2 ramp-up this year. This strategic timing positions Galan to capitalize on the anticipated recovery of lithium prices.

Future Growth and Resource Potential

Galan Lithium has ambitious plans for further expansion at HMW, with two additional phases in the pipeline. Phase 3 aims to achieve a production capacity of 40,000 tonnes per year within a two- to five-year timeframe, while Phase 4 has a longer-term target of 60,000 tonnes per year.  The project boasts substantial reserves of 7.3 million tonnes of lithium carbonate equivalent (LCE) at a high grade of 852 mg/L of lithium, representing the highest-grade and lowest-impurity lithium brine resource in Argentina.

Navigating Market Dynamics

This expansion comes at a time when lithium carbonate prices have experienced a significant correction, falling to $9.10-9.40/kg cif China on December 31st, down from $13-14/kg at the start of 2024.  Prices have plummeted by 86% since their 2022 peak, prompting several hard rock lithium producers in Africa and Australia to curtail production and conserve resources.  However, brine producers like Galan, with their larger scale and lower operating costs, are better positioned to weather the price downturn and benefit from sustained demand from lithium-iron-phosphate (LFP) battery manufacturers.