Australian lithium miner Galaxy halts trading in shares pending Argentina announcement

An undated handout picture of Pilbara Minerals Limited’s Pilgangoora lithium mine under construction in the Pilbara region of Western Australia. (Reuters pic)

PERTH: Australian lithium miner Galaxy Resources Ltd announced a trading halt on its ASX-traded shares on Monday, pending an announcement about selling a package of mining tenements in Argentina to South Korea’s POSCO.

Galaxy agreed to sell some mining tenements in Argentina to steelmaker POSCO for US$280 million in late May. They are located in the northern area of the Salar del Hombre Muerto salt flat.

The firm said at the time that proceeds from the deal would fund the development of its flagship Sal de Vida project.

Amid potential signs of China’s battery chemical market being oversupplied, short selling of shares of lithium miners has swelled this year, reflecting what fund managers say is a sign of growing scepticism of an imminent battery boom.

Lithium is a critical ingredient for batteries used in electric vehicles.

POSCO entered a deal with Australia’s Pilbara Minerals Ltd in February featuring an upfront A$79.6 million (US$58.24 million) equity investment in Pilbara, securing supply of chemical grade spodumene concentrate, mined for its lithium content.