As a testament to Namibia being a Tier 1 mining jurisdiction, specialty minerals miner SQM has partnered with critical raw materials producer Andrada Mining, contributing a $20-million investment to expand the development of the Namibia-based Lithium Ridge project, where exploration drilling in 2023 confirmed 6 km worth of lithium mineralisation at surface continuing at depth.

The Lithium Ridge licence has been transferred into Grace Simba Investments (GSI) – an entity 100% owned by Uis Tin Mining Company (UTMC), which is a wholly-owned subsidiary of Andrada.

Representing SQM’s first lithium foray into Africa, Andrada Mining CEO Anthony Viljoen says SQM’s involvement with Lithium Ridge brings the company’s extensive knowledge and understanding of the global lithium resources into the project. “We believe that their decision to partner on Lithium Ridge is an endorsement of its high-quality mineralisation.”

Lithium Ridge – a fully permitted mining licence covering an area of about 3 300 ha and located 35 km from Uis mine – hosts multiple pegmatites with mineralisation including spodumene-dominant lithium, tin and tantalum.

Lithium Ridge’s proximity to Uis mine is an advantage given the potential synergies through the established infrastructure and availability of skilled workforce, backed up by Andrada’s “invaluable” experience and increasing understanding of the mineralisation of the region, he says.

Exploration programmes at the project to date have found continuous mineralisation along a 6 km strike length, with reverse circulation drilling intercepting lithium grades of up to 2.13% lithium oxide, proving high grade mineralisation that extends at depth and along strike.

“SQM’s expertise in spodumene – the type of lithium present at Lithium Ridge – is greatly valued for this project,” Viljoen motivates.

Currently, the project is awaiting approval from the Namibian Competition Commission, which once granted, will see SQM’s initial investment being spent over 3.5 years.

“Our exceptional geology team, now combined with the proven expertise of SQM – including financial, operational and market expertise – means this project is destined to succeed and is poised to take centre stage as the energy transition continues,” Viljoen enthuses to Mining Weekly.

Earn-In Partnership

While Lithium Ridge does not yet have a declared resource, the partnership agreement between the two companies includes a payment of a once-off success fee, payable by SQM, should Andrada complete a Joint Ore Reserves Committee 2012-compliant mineral resource estimation of 40-million tonnes during the third earn-in period.

Upon signing the partnership with SQM, Andrada received a $500 000 participation fee from SQM with a balance of $1.5-million to be paid on receipt of the Namibian Competition Commission approval.

Once this approval has been attained, Andrada will move forward to Stage 1 of project development, in which SQM may earn a 30% interest in GSI by funding $7-million towards exploration over an 18-month period.

Stage 2 entails a further 10% interest in GSI for SQM, thereby increasing its shareholding to 40%, through the additional funding of $13-million in exploration activities over a further 24 month period.

In Stage 3, SQM may earn an additional 10% interest in GSI, thereby increasing its shareholding to 50% of the Lithium Ridge asset, through the achievement of either the completion of a definitive feasibility study for Lithium Ridge, or a total of $40-million being incurred on development, whichever is earlier.

Andrada and SQM will create a joint development committee (JDC) to oversee the development of GSI, with the JDC being constituted of an equal representation of members from SQM and Andrada management.

Andrada will be the operator of the project and the overall partnership will entail close collaboration between Andrada and SQM geologists to ensure the project is well-serviced.

As a highly reputable company with a proven track record for lithium project development, Viljoen says the partnership with SQM facilitates several processes beyond the actual development of Lithium Ridge, including market recognition, offtake agreement processes, maintaining local stakeholder support and sourcing additional funding.

Further Expansion

Partnering with SQM also enables Andrada to advance its other portfolio offerings in parallel.

“Andrada is focused on a strategic approach to simultaneously maximise value from these different plays. This differentiates Andrada’s offering and places the company firmly on track to becoming a producer of a whole suite of critical raw materials for the energy transition,” states Viljoen.

Andrada is undertaking an expansion of its tin production, having launched the pre-concentration project for the Uis mine in March 2024, which will increase the tin grade and output from the processing plant to 1 600 t/y of contained tin.

“The goal is to establish a tin production hub at Uis to enhance our pipeline and to entrench Andrada as a leading critical metals producer in Namibia,” he says.

Viljoen says that despite difficult market conditions in recent years, lithium’s critical role in the energy transition will “undoubtedly reverse this trend” and says Andrada will stand to benefit once it does.

“It is encouraging to see indications within the market that this trend reversal is coming closer, with significant merger and acquisition activity taking place in the sector in the past few months and majors continuing to invest determinedly in exploration projects,” he states.

The accelerated development of not just Lithium Ridge, but Andrada’s petalite offering from Uis, highlights Viljoen, will “coincide well” with the expected price uptick.