(Yicai Global) Aug. 31 -- Jinyuan EP, a Chinese cement maker shifting into lithium mining, will receive local government support to develop a lithium salt lake project in Argentina’s northwestern Catamarca province.

The Catamarca government will help Jinyuan secure approval to extract lithium from Laguna Caro and roll out preferential policies for the firm so the project can start production as soon as possible, the Hangzhou-based company said today, citing the cooperation agreement. It paid USD27 million  last month for the mining rights to Laguna Caro.

Under the deal, Catamarca also will help Jinyuan to develop other lithium salt projects in the province, while the company will promote projects in the region’s supply chain, including the use of lithium technologies, lithium salt deep processing, and lithium battery making.

Jinyuan is looking at several lithium projects in the province that are rich in lithium resources and aims to garner enough resources to support the construction of a lithium salt production facility in the region with an annual processing capacity of 50,000 tons, it added.

Last month, Jinyuan also announced that it had acquired the mining rights to a section of Cauchari-Olaroz in Salta province, also in the northwest of Argentina, for USD2.5 million and will invest another USD50 million to USD100 million. Here it plans set up a pilot processing plant with the capacity to turn out 1,000 tons to 2,000 tons of lithium salts a year.

Jinyuan has been expanding its business into developing and processing lithium salts in recent year. In the second half of last year, the firm took over a number of lithium brine developers in China’s western Tibet Autonomous Region and lithium salt processing projects in the country’s northwest.

Shares of Jinyuan [SHE: 000546] closed up 0.9 percent today at CNY17.35 (USD2.52) each amid a wider market downturn.

Editor: Futura Costaglione