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SQM moves on WA lithium deposits

Sociedad Química y Minera de Chile (SQM) has increased its footprint in Western Australia's lithium corridor.

Sociedad Química y Minera de Chile (SQM) has increased its footprint in Western Australia’s lithium corridor.

The news comes within days of its major shareholder, Tianqi, entering into a takeover of Essential Metals with IGO.

SQM has partnered with Wesfarmers to develop the $1.9 billion Mt Holland lithium project in WA and will pay $20 million for a 19.9 per cent stake in Azure Minerals.

The South American-based company has invested $4.2 million in Azure as the first step to gaining a 19.9 per cent stake.

SQM will then invest another $15.8 million if its due diligence raises no red flags and subject to the signing of an off-take agreement for 25 per cent of all of Azure’s lithium product.

The initial focus of the project, dubbed the Andover Project, was nickel and copper but with lithium making a name for itself during the last few months, that focus has shifted.

Azure managing director Tony Rovira said the investment showed SQM’s strong interest and belief in the lithium potential of Andover, located south of Roebourne in the Pilbara.

“This is a significant milestone event and is a strong endorsement of Azure and our projects by one of the world’s leading lithium producers,” he said.

“The new relationship will allow Azure to draw upon SQM’s technical expertise in pegmatite-hosted lithium exploration, project development, production and marketing, providing Azure with strong support as we look to develop the Andover lithium assets.”

The SQM investment will leave Azure with a cash balance of more than $25 million to accelerate lithium exploration.

SQM and Wesfarmers are currently building a lithium hydroxide plant almost next door to Tianqi at Kwinana to process lithium from the Mt Holland mine.

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