Lithium giant SQM partners with Talga Group in $28.5m Aero project earn-in agreement

Australian battery metal specialist Talga Group (ASX: TLG) has entered into an earn-in agreement with global lithium giant Sociedad Química y Minera de Chile (SQM) for the Aero project in Sweden.

SQM can earn up to a 70% ownership interest in the project by solely funding exploration expenditures of up to $28.5 million over the next seven years.

Talga managing director Mark Thompson said the agreement follows SQM’s completion of extensive due diligence on Aero, including site visits.

Hard rock potential

Under the agreement, which is subject to Swedish foreign direct investment clearance, Talga will be paid a management fee for each stage of the potential earn-in arrangement and a success fee if a decision to mine at Aero is made.

“We are delighted to partner with SQM on our Aero lithium project in Sweden, which provides an important opportunity to build a European lithium supply for the green transition and EU localisation objectives,” Mr Thompson said.

“As one of the few potentially large-scale lithium hard rock opportunities in Europe, Aero could be significant to the region’s battery and electric vehicle industry.”

Europe currently provides less than 1% of the global lithium supply but is seeking to boost this by 2030.

Aero covers 270 square kilometres to the south and east of Gällivare, where Talga has discovered lithium-prospective pegmatites over approximately 50km in total strike, with surface sample results up to 1.9% lithium oxide.

EU targets

Lithium is classified as a strategic raw material and is subject to domestic extraction targets under the EU Critical Raw Materials Act.

The act, which came into force in May of this year, aims to diversify Europe’s supply of key critical minerals needed for clean energy.

Benchmark targets have been set that the EU must meet by 2030 to secure the supply of critical minerals such as lithium, copper and cobalt.

These targets stipulate that 10% of the EU’s annual consumption of critical raw minerals must be extracted within the EU.

Competitive portfolio

SQM International lithium division chief executive officer Mark Fones said the Talga agreement represents the company’s efforts to build a global and competitive lithium asset portfolio.

“Expanding into new and promising jurisdictions such as Sweden has been a strategic goal for us,” he said.

“Partnering with Talga, who has demonstrated expertise in the region, further enhances this achievement.”