Galaxy Resources hires JPMorgan on $376mn Lithium, Potash project
Galaxy Resources, a leading publicly traded Australian mining company, has announced that it has hired JPMorgan as a financial advisor to evaluate the company’s “strategic options” in regard to its Sal de Vida lithium, potash project in Argentina.
The announcement confirms speculation, coming from media outlet The Australian, that the firm is looking to sell its stake in the project to a number of Chinese or Korean interested parties.
“As previously advised to the market, the company is currently in discussions with a range of parties in relation to potential offtake and strategic partnership opportunities,” Galaxy said. “These discussions are preliminary in nature and there is no certainty as to whether a definitive transaction will eventuate from them.”
Speculation surrounding a potential deal for the project comes amidst strength in the regional lithium market, with Argentina, Chile and Bolivia accounting for more than 60% of the world’s annual lithium production.
Galaxy reveals that, once operational, the mine could produce up to 25,000 tonnes of lithium carbonate and 95,000 tonnes of potassium chloride each year, equating to annual revenues of $354mn, with a net operating cash flow of $273mn.
Zimbabwe targets £8.8bn mining industry by 2023
Zimbabwe’s government plans to fast-track exploration, evaluation and digitalisation of selected reserved mining areas under the Ministry of Mines and Mining Development as part of wider measures to achieve a £8.8 billion mining industry by 2023, according to a senior government minister.
Information Minister Monica Mutsvangwa said other plans include stopping the issuance of special grants in the reserved areas under the Ministry of Mines and Mining Development until the exploration and evaluation is complete and a robust value addition program for diamonds is implemented.
Mutsvangwa was speaking at a post-cabinet media briefing on December 15.
She adds that the issuance and renewal of special grants for energy should also be based on the financial and technical capacity to value add all types of coal, as well as for ideal exploration of Coal Bed Methane.
For renewal of special grants, consideration should take into account the period the Special Grant has been held as well as plans with milestones for value addition of the special grant, Mutsvangwa says. She adds that the Zimbabwean government expects gold to drive the mining sector in order to achieve the ambitious target, with the precious metal expected to contribute approximately £2.96 billion to the overall target.
Mining is one of Zimbabwe’s major contributors to its economy, alongside agriculture, which is the mainstay. The mining sector accounted for more than 60 percent of the country’s foreign currency receipts in 2019, and contributed around 16 percent to national Gross Domestic Product, the Chamber of Mines says.
The country’s mining industry is focused on a diverse range of small to medium mining operations. The most important minerals produced in Zimbabwe include gold, asbestos, chromite, coal and base metals.
Zimbabwe expects its economy to expand by 7.4 percent in 2021 from a projected contraction of 4.5 percent this year, due to the effects of drought and the COVID-19 global pandemic.
When presenting the 2021 National Budget in November this year, Finance and Economic Development Minister, Professor Mthuli Ncube, said that the mining sector is projected to rebound by 11 percent next year after surviving a COVID-19 induced shock that saw the sector contract by 4.7 percent in 2020. In September, mining bans in national parks were introduced, according to news agencies.
He added that the National Budget would allocate £1 billion towards the operations of the ministry for planning, promotion and exploration, data capturing, and automation, among other key mining processes.
Other factors necessary for the achievement of the £8.8 billion target include a stable macroeconomic environment, policy consistency, and availability of long-term capital to fund mining projects along the entire mineral value chain, the minister said.
Stopping "illicit financial flows" from gold smuggling is another key issue to address, according to media reports.