Lithium Argentina (TSX: LAR, NYSE: LAR) is doubling down on its South American ambitions.
The company announced Friday it has signed a letter of intent (LOI) with Ganfeng Lithium Co. Ltd., one of the world’s largest lithium producers, to jointly develop the Pozuelos-Pastos Grandes (PPG) basin in Argentina.
The move will consolidate their current holdings in the region — including Ganfeng’s wholly owned Pozuelos-Pastos Grandes project, the Pastos Grandes project (85% owned by Lithium Argentina), and the Sal de la Puna JV (65% owned by Lithium Argentina) — into a unified development plan aimed at creating a large-scale, low-cost lithium hub.
The proposed regional development framework targets combined production capacity of up to 150,000 tonnes per annum (tpa) of lithium carbonate equivalent (LCE), with additional flexibility to produce lithium chloride for battery markets. The development strategy will take a phased approach and use a combination of solar evaporation and direct lithium extraction (DLE) technology.
“Following the ramp-up at the Cauchari-Olaroz lithium operation over the past year, we are excited to build on our experience and strengthen our proven partnership model to support these growth plans,” said Sam Pigott, President and CEO of Lithium Argentina, in a statement.
“Our ongoing efforts to finalize the regional development plan at PPG are encouraging and should present a compelling, low-cost solution to help meet future battery market demand.”
Unlocking scale, lowering cost
The proposed consolidation is expected to unlock significant operating and capital synergies, allowing for a larger, more efficient development than the partners could achieve independently. A 5,000 tpa DLE demonstration plant, currently under construction for installation at Cauchari-Olaroz, will support the regional rollout of the new technology.
The company expects that DLE will not only improve lithium recovery and reduce cost but also lower the environmental impact of operations—particularly by cutting water usage and minimizing reliance on chemical reagents.
The shift toward DLE mirrors a broader trend in the lithium sector, where companies are pushing for more sustainable and scalable extraction technologies to meet growing demand from electric vehicle and energy storage sectors.
Financing and offtake strategy in the works
Lithium Argentina and Ganfeng are also jointly evaluating financing options for the combined PPG operation, including potential offtake agreements and minority equity partnerships with strategic buyers and battery supply chain players. While details remain limited, the companies are positioning the project as an attractive long-term source of battery-grade lithium for global markets.
The newly proposed JV structure is still subject to a number of customary conditions, including completion of the regional development plan, regulatory approvals, and the negotiation of definitive agreements.
Momentum builds in the Lithium Triangle
The announcement adds another leg to Lithium Argentina’s growing portfolio in Argentina’s Lithium Triangle, one of the most important lithium-producing regions globally. It follows the company’s successful ramp-up of the Cauchari-Olaroz brine operation, which it co-operates with Ganfeng. That project is already producing battery-grade lithium carbonate and is expected to serve as a model for future development.
By consolidating its PPG assets with Ganfeng, Lithium Argentina is clearly moving to scale up quickly and efficiently, at a time when developers across the lithium space are under pressure to deliver volume, cost control, and ESG improvements in lockstep.
If the JV proceeds as planned, it would represent one of the largest regional lithium consolidation efforts in Argentina to date. That’s another sign that global players are increasingly looking to integrate upstream operations in resource-rich jurisdictions.
Shares of Lithium Argentina were little changed following the news, but analysts expect updates on financing and permitting later this year as the regional development plan progresses.