KEY POINTS
- SQM and Andrada Mining sign a deal to develop the Lithium Ridge asset in Namibia.
- SQM invests $22 million over three years, potentially securing a 50 percent stake in the project.
- The partnership boosts Andrada’s market value and positions Namibia as a key player in African lithium development.
Chile’s SQM, the second-largest lithium producer in the world, has taken a major step into Africa through a partnership with Andrada Mining.
The deal focuses on the development of the Lithium Ridge asset in Namibia, a key opportunity in the country’s growing mining sector.
Partnership details and investment strategy
SQM and South Africa-based Andrada Mining have entered a three-stage earn-in agreement, which allows SQM to secure up to a 50 percent stake in Grace Simba Investments (GSI), the unit that holds the Lithium Ridge licence.
The project is located near Andrada’s flagship Uis tin mine, about 35 km away, and offers significant potential for lithium extraction.
SQM will invest an initial $2 million, followed by $20 million in exploration expenditures over three years to earn a 40 percent stake in GSI.
An additional 10 percent stake can be gained by funding a definitive feasibility study (DFS). Moreover, if the lithium resource exceeds 40 million tonnes, Andrada Mining will receive a success fee as part of the agreement.
“This partnership solidifies our belief in the Lithium Ridge asset as a potential world-class resource,” said Anthony Viljoen, CEO of Andrada Mining. “It also places Namibia at the forefront of the African lithium development trajectory.”
Accelerating Namibia’s lithium development
Namibia’s Erongo Region, where the Lithium Ridge asset is located, has already proven to be rich in lithium and other valuable minerals such as tantalum.
Furthermore, Andrada Mining plans to develop a vertically integrated lithium industry within the country, leveraging its established production of tin and tantalum from the Uis mine.
The project’s licence covers 19,700 hectares, with substantial potential for further exploration.
The deal with SQM showcases the importance of the Lithium Ridge asset and adds substantial technical and financial backing to the project.
Andrada Mining will remain the operator, while SQM will bring its global expertise in lithium mining to the venture.
Market reaction and future outlook
News of the agreement boosted shares in Andrada Mining, which surged by 19 percent in London trading. According to a report by Mining.com, the company now holds a market capitalization of £62 million ($81 million), reflecting investor confidence in the potential of the Lithium Ridge project.
This partnership marks SQM’s first African venture, positioning the Chilean company as a key player in Namibia’s burgeoning lithium sector.
The collaboration also has the potential to significantly boost Namibia’s mining economy, with the project projected to contribute over 50 billion euros to the country’s economy.
The deal further underscores the increasing global demand for lithium, a key component in batteries for electric vehicles and renewable energy storage, and positions Namibia as an emerging player in the global lithium market.
