Galaxy Resources and General Mining called a trading halt yesterday to hold talks to finalise a $700 million merger, another facet in lithium boom.
The companies are part owners of the previously mothballed Mt Cattlin spodumene mine in WA, entering an agreement last year to recommence its operations.
The merger is expected to see Galaxy take over GM and could see the company over take current lithium leader Pilbara Metals and its Pilgangoora lithium-tantalite mine, according to the West Australian.
Mt Cattlin operations began in April this year with General Mining expecting an output of at least 800,000 tonnes per annum.
Galaxy was WA’s initial leader in lithium production with former managing director Iggy Tan developing the mine and a China lithium carbonate plant for spodumene processing before cash flow and operational issues led to its collapse.
Before its closure, the mine produced over 100,000 tonnes of spodumene between 2009 and 2012.
Several junior companies have joined the race for lithium exploration, pushed by the shifting attitudes towards renewable energy and greener car alternatives.
Companies such as Adelaide Resources and Pioneer Resources are already in the market with Poseidon recently announcing its Lake Johnston project in WA contained high grade lithium pegmatite resources.