Galan Lithium Unlocks Phase 2 Permit, Tripling Hombre Muerto West Output

Permit Milestone Secures Expansion Pathway

Galan Lithium Limited (ASX:GLN) has taken a significant step forward in its Hombre Muerto West (HMW) lithium brine project in Argentina with the granting of the full Phase 2 mining permit. This approval allows Galan to increase production capacity to 21,000 tonnes per annum (tpa) of lithium carbonate equivalent (LCE), more than tripling the output envisaged in Phase 1.

The permit encompasses all necessary construction activities, including ponds, processing plant, onsite laboratory, power infrastructure, and other facilities. This comprehensive approval clears a major regulatory hurdle, positioning Galan to advance towards commercial-scale operations, subject to securing project financing and successful Phase 1 delivery.

Competitive Cost Position and Market Resilience

Independent benchmarking by Wood Mackenzie places HMW within the first quartile of the lithium industry’s all-in sustaining cost (AISC) curve. This low-cost positioning is critical in a market where lithium prices can be volatile, ensuring that Phase 2 production would be cash flow positive even at current lithium carbonate prices.

Galan’s Managing Director, Juan Pablo Vargas de la Vega, highlighted the project’s resilience and premium product quality, noting that HMW is poised to be a globally significant lithium source with a strong cost and environmental profile. The project’s conventional evaporation method reduces energy and water consumption, aligning with growing investor and regulatory demands for sustainable mining practices.

Strategic Alignment with Argentina’s Investment Incentives

The granting of the Phase 2 permit also supports Galan’s application for Argentina’s RIGI (Regimen de Incentivos para Grandes Inversiones), a new incentive regime designed to attract large-scale investments. This could provide Galan with fiscal benefits and further enhance project economics, reinforcing the company’s commitment to long-term development in Catamarca province.

Galan has maintained a strong partnership with local authorities, targeting at least 70% local content in employment and contracting. The company has invested in skills training to build a sustainable local workforce, reflecting a broader social license to operate and community engagement strategy.

Progress to Date and Outlook

Since the initial discovery well in 2019, Galan has rapidly advanced the HMW project. The resource has grown to rank among the world’s top 20 lithium deposits. Definitive Feasibility Studies for both Phase 1 and Phase 2 were completed in 2023, validating the project’s technical and economic viability. Construction of Phase 1 is underway, with over 6,000 tonnes of lithium inventory already accumulated in evaporation ponds.

With the Phase 2 permit now secured, the company is well positioned to scale operations, subject to financing and market conditions. Investors will be watching closely how Galan navigates these next steps amid evolving lithium demand dynamics and Argentina’s regulatory landscape.