SANTIAGO, March 28 (Reuters) - Chilean chemicals firm SQM said on Monday that it had entered into a joint venture with Canadian junior miner Lithium Americas to develop a lithium project in Argentina, at a time when demand and prices for the key battery ingredient are rocketing.
SQM and Lithium Americas said in a statement that they will immediately move forward with an updated feasibility study for the Cauchari-Olaroz lithium project near the Chilean and Bolivian borders.
The study will examine the economic feasibility of a project with annual output of 40,000 tonnes of lithium carbonate equivalent, they said.
SQM , one of the world’s biggest lithium producers with access to lucrative reserves in northern Chile, has been on uneasy terms with the Chilean government in recent months and has previously expressed an interest in tapping resources outside the country.
The Argentine lithium market, meanwhile, is attracting foreign investors thanks to the recent election of a market-friendly government and interest in the mineral from electric vehicle manufacturers who use lithium in their batteries.
SQM will contribute technical expertise to the new venture and has paid $25 million for a 50 percent stake in a subsidiary of Lithium Americas, which recently changed its name from Western Lithium.
Earlier this month, Australian junior mining company Orocobre Ltd told Reuters it is on track to reach full production by September at its nearby Olaroz project. (Reporting by Gram Slattery; Editing by Meredith Mazzilli)