SQM, Andrada Mining to enter earn-in agreement for lithium mining

SQM, the world’s second-largest lithium producer, has received approval from Namibian authorities to move forward with an earn-in agreement with Andrada Mining, a South African company. This collaboration focuses on developing the Lithium Ridge project, situated about 35 km from Andrada’s Uis tin mine.

Under the agreement, SQM has the option to acquire up to a 50% stake in Grace Simba Investments (GSI), the Andrada subsidiary holding the project license. Andrada’s CEO, Anthony Viljoen, emphasized that this approval marks a major step in launching what he called a “transformative partnership.”

Lithium potential in Namibia

SQM is set to invest up to $40 million, a move expected to drive the project’s advancement while also fostering economic growth in Namibia’s lithium-rich Erongo region. Andrada will continue to operate the project and is eligible for a success fee if the lithium resource surpasses 40 million tonnes. This deal not only represents SQM’s first venture into Africa but also underscores Namibia’s rising importance in the global lithium market.

Namibia is home to Africa’s largest lithium reserves after the Democratic Republic of Congo, Mali, and Zimbabwe. The country possesses lithium pegmatites that stretch for hundreds of kilometres beneath its arid plains. Mining currently accounts for 10% of Namibia’s gross domestic product.  However, Namibia is one of the few mineral-rich countries in Africa that has not yet joined the Extractive Industries Transparency Initiative (EITI). With global demand for lithium growing it remains to be seen if mining can benefit Namibia’s citizens.