DEVELOPING a new lithium mine in a volatile market has obvious risks for lenders, but exploration company Lithium Africa says its Springbok project has attracted two funding offers as it targets first production in 2027.
One is a prepayment and offtake proposal from a “major international commodity trading house”, which would take all of Springbok’s spodumene concentrate for its first three years. The other is a $60m investment proposal from a lithium processing company backed by a Fortune Global 500 group.
Lithium Africa is a Canadian-listed lithium exploration and development company building a portfolio of hard-rock lithium assets across Africa. The Springbok project, in the Northern Cape, sits outside its 50:50 joint venture with GFL International, an affiliate of China’s Ganfeng Lithium.
CEO Thomas Benson said the approaches showed the level of interest in Springbok, describing it as “a permitted mine with a path to production in 2027”.
Under the prepayment proposal, the commodity trader would provide upfront funding in return for 100% of Springbok’s spodumene concentrate for the first three years of production.
Benson told Miningmx discussions over the size of the facility were continuing, but said the prepayment and offtake arrangement was expected to support near-term production.
The second proposal would see the lithium processing company invest $60m in a new holding company containing Lithium Africa’s 70% stake in Namli Exploration & Mining, the South African company that owns Springbok.
The investor would take 55% of the holding company, reducing Lithium Africa’s effective interest in Namli from 70% to 31.5%. Its B-BBEE partner would retain its existing 30%.
Of the $60m, about $10m would go towards drilling across the wider Springbok district and $50m towards a processing plant.
Benson said Lithium Africa’s task was now to select “the partner and the structure that deliver the most value” to shareholders.
The strategy is to get a relatively small operation into production first and use the cash it generates to fund further exploration across the district.
The operation is expected to process existing stockpiled material and newly mined ore through an on-site dense media separation plant to produce spodumene concentrate.
Lithium Africa has not yet disclosed the planned production rate or development cost, saying these should be set out in a preliminary economic assessment in the first half of 2027.
The $60m proposal implies a pre-money valuation of about $70m for 100% of Namli, despite Springbok not yet having a published mineral resource. Lithium Africa told Miningmx the valuation reflected the potential investor’s commercial assessment of the project.
Both offers remain non-binding. The company is also in discussions with about 20 other counterparties over offtake, prepayment, vendor finance and project-level equity. “With more than 20 counterparties engaged, we are running a competitive process,” Benson said.
Several hurdles remain before production. Infill drilling is due to be completed in the first quarter of 2027, followed by an initial mineral resource estimate and preliminary economic assessment in the first half.
Environmental authorisation and a project financing decision are also targeted for that period, with construction planned to start around mid-year.
Lithium outlook
The financing interest comes against a lithium market that remains volatile after a steep price downturn.
Sibanye-Stillwater, which is developing the Keliber lithium project in Finland, said at its interim results in September that lithium hydroxide prices had climbed to almost $28,000/t in May as supply tightened, before retreating as exports resumed from Zimbabwe and expectations of mine restarts elsewhere increased.
Sibanye said demand continued to grow from electric vehicles and energy storage, although new supply was likely to have an impact on prices in the near term. It identified macroeconomic conditions and geopolitical uncertainty as the main downside risks.
The longer-term picture remains one of sharply rising demand. Benchmark Mineral Intelligence – a battery supply-chain research group – estimates global lithium demand will increase from 2.11 million tons (Mt) of lithium carbonate equivalent in 2026 to about 7 Mt by 2050.
Meeting that growth would require output equivalent to 134 new lithium mines and more than $100bn of investment, according to Benchmark.