Ganfeng's $180M convertible investment lifts Lithium Argentina stake to 16%

Ganfeng Lithium deepened its Argentina lithium bet with a $180 million convertible note in Lithium Argentina, lifting its potential stake to 16.1 percent while consolidating three Salta brine projects into a single joint venture.

"The PPG JV and this Strategic Investment reflect the strength of a partnership built over nearly a decade and more than $2 billion of combined investment in Argentina's lithium sector," Wang Xiaoshen, CEO of Ganfeng, said.

The six-year unsecured note carries a 4 percent coupon and converts at $12.50 per share, a roughly 96 percent premium to Lithium Argentina's five-day volume-weighted average price on the NYSE through Aug. 21. Proceeds, together with cash on hand, will fully repay the company's $259 million convertible debt due January 2027, extending the company's debt maturity profile on an unsecured basis.

The PPG JV, expected to close in September, consolidates Ganfeng's Pozuelos-Pastos Grandes project with Lithium Argentina's Pastos Grandes and Sal de la Puna projects under Millennial Lithium B.V., a Dutch holding company owned 67 percent by Ganfeng and 33 percent by Lithium Argentina. The integrated development targets 150,000 tonnes per annum of lithium carbonate equivalent across three phases, leveraging shared infrastructure and one of the largest consolidated lithium brine resource bases globally.

The transaction also terminates Lithium Argentina's existing $130 million debt facility, releasing associated security and preferential offtake rights. Ganfeng's subsidiary GFL International will receive 14.4 million additional common shares upon full conversion, bringing its fully diluted ownership to approximately 16.1 percent from about 9.6 percent today.

At Cauchari-Olaroz, the largest lithium brine operation in Argentina, Lithium Argentina holds a 44.8 percent stake, Ganfeng owns 46.7 percent, and JEMSE, a mining investment company owned by the Jujuy provincial government, holds 8.5 percent. Sam Pigott, CEO of Lithium Argentina, said the operation holds more than $300 million in liquidity and generates substantial free cash flow, giving the company the means to fund the Stage 2 expansion organically. The company received approval for the Stage 2 expansion under Argentina's RIGI incentive regime, which provides tax and regulatory benefits for large-scale investments.

Lithium Argentina ended Q2 with $100 million in cash and received $27 million in distributions from Cauchari-Olaroz in Q3. The company expects the strategic investment proceeds, combined with existing cash, to fully cover the $259 million convertible debt maturity.

PPG JV Targets 150,000 tpa of LCE

The PPG JV brings together three adjacent projects in Salta Province — Ganfeng's Pozuelos-Pastos Grandes, Lithium Argentina's Pastos Grandes, and Sal de la Puna — creating a single consolidated basin-wide development. The partners aim to grow combined capacity beyond 200,000 tonnes per annum of LCE, with shared infrastructure across the basin and advanced processing technologies.

Ganfeng's Hong Kong-listed shares rose 4.9 percent on the announcement, reflecting investor approval of the deal structure. The conversion price of $12.50 represents a significant premium to Lithium Argentina's current trading levels, suggesting Ganfeng sees long-term upside in the company's growth trajectory.

The investment comes as lithium prices remain under pressure from global oversupply, but both companies are betting on sustained demand growth from electric vehicles and energy storage. The deal structure — an unsecured convertible note rather than equity issuance — minimizes dilution for existing Lithium Argentina shareholders while giving Ganfeng a path to deeper ownership and greater influence over the company's strategic direction.

The PPG JV is expected to complete in September 2026, subject to regulatory approvals including from the TSX and NYSE. Lithium Argentina said it plans to pursue project-level debt financing for PPG and may introduce a minority strategic investor. For investors, the deal shows that major lithium producers view current price weakness as temporary, with both companies committing capital to expand capacity ahead of an expected demand recovery from EV and energy storage markets.

This article is for informational purposes only and does not constitute investment advice.