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Galaxy Resources seeking 40% stake in lithium processing plant in China

Galaxy Resources Ltd. is looking for a Chinese partner that can help build a 25,000-tonne-per-year lithium processing plant in China, The Australian Financial Review reported May 29, citing Chairman Martin Rowley.

Galaxy is seeking a 40% stake in the plant, which is estimated to cost between US$50 million and US$60 million, according to the report. The plant would process spodumene concentrate from Galaxy's Mount Cattlin mine in Western Australia into either lithium carbonate or lithium hydroxide.

The processing move comes after the company's debt-free balance sheet was recently reinforced by POSCO's final settlement for the US$280 million sale of tenements near Galaxy's Sal de Vida lithium project in Argentina.

Rowley said it was not as sensible to build a new processing plant in Western Australia, with about five to six years of remaining mine life at Mount Cattlin.

"But we can participate in a new or existing facility for that time and then work on getting a substitute [mine] asset from somewhere, which is the likes of Alliance," he was quoted as saying, referring to Alliance Mineral Assets Ltd. and its Bald Hill lithium mine in Western Australia.

Galaxy recently subscribed for A$22.5 million worth of Alliance Mineral shares.