Lithium Argentina AG and Ganfeng Lithium Group Co. Ltd. have signed definitive agreements to establish the Pozuelos-Pastos Grandes (PPG) joint venture in Salta Province, Argentina. The partnership will consolidate three neighboring lithium projects—Ganfeng’s Pozuelos-Pastos Grandes project and Lithium Argentina’s Pastos Grandes and Sal de la Puna projects—into a single, integrated development.
The PPG joint venture is designed as a large-scale, basin-wide lithium operation with planned production capacity of 150,000 tonnes per annum (tpa) of lithium carbonate equivalent (LCE) across three development phases. By combining infrastructure and resources, the partners aim to improve operational efficiency, lower development costs and accelerate project financing.
Under the finalized structure, Ganfeng will hold a 67% interest in the PPG JV, while Lithium Argentina will retain 33%. Ganfeng’s Salta-based team will operate the project, supported by a joint technical and financial committee. Major decisions involving development plans, budgets and financing will require approval from both partners. Funding will generally follow ownership percentages.
The companies are also jointly pursuing project-level financing, including debt and the possibility of bringing in a minority strategic investor. Both partners will receive lithium offtake in proportion to their respective ownership interests. Historical combined investment in the PPG projects, including property acquisition and development, has reached approximately $1.8 billion.
The PPG JV is expected to be completed in September 2026. Following completion, the projects will be consolidated under Millennial Lithium B.V., which will be owned 67% by Ganfeng and 33% by Lithium Argentina. The project has also applied for Argentina’s RIGI investment incentive regime, covering the full 150,000 tpa development plan, with approval expected by the end of 2026.
Alongside the joint venture, Ganfeng will make a $180 million strategic investment in Lithium Argentina through a six-year unsecured convertible note. The note carries a 4% annual coupon and can be converted into Lithium Argentina shares at $12.50 per share. The conversion price represents a premium of approximately 96% to the company’s five-day NYSE VWAP through August 21, 2026.
Lithium Argentina plans to use the investment proceeds, together with available cash, to fully repay its existing $259 million convertible debt due in January 2027. The move is expected to extend the company’s debt maturity profile, strengthen liquidity and reduce near-term refinancing pressure.
Lithium Argentina ended the second quarter of 2026 with $100 million in cash and equivalents and subsequently received $27 million in distributions from the Cauchari-Olaroz operation. The company expects these resources, combined with Ganfeng’s investment, to support debt repayment and provide greater financial flexibility.
The existing $130 million debt facility will also be terminated when the strategic investment closes, releasing associated security and preferential offtake rights. Ganfeng currently owns about 9.6% of Lithium Argentina. If the convertible note is fully converted, Ganfeng would receive approximately 14.4 million additional shares and increase its ownership to around 16.1% on a fully diluted basis.
Both companies view the agreement as a platform for long-term lithium growth in Argentina, with their broader objective of exceeding 200,000 tpa of LCE capacity through technological development, infrastructure investment and expanded low-cost lithium chemical production.
Product Impact and Chemical Commodity Price Impact
The transaction is strongly positive for lithium carbonate and lithium hydroxide because it consolidates three Salta projects into a 150,000 tpa LCE development and improves financing visibility. Greater investment, shared infrastructure and Ganfeng’s operating expertise could accelerate future lithium chemical production and strengthen Argentina’s position as a major supply hub. However, the additional capacity is primarily a long-term supply factor and is unlikely to materially change prices immediately. Over the medium to long term, successful project development could increase global lithium carbonate and hydroxide supply, potentially limiting price appreciation if demand does not expand at a similar pace. Near-term prices may remain driven by EV demand, inventories and global production economics.
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