(Yicai Global) Nov. 14 -- Shares in Tibet Summit Resources plunged as much as 7.8 percent today after the Chinese mining firm said it is parting ways with PowerChina International Group, the world’s biggest electrical engineering contractor, which Tibet Summit hired to be general contractor of its lithium extraction project in Argentina.

Tibet Summit’s share price [SHA:600338] closed down 6.9 percent at CNY24.04 (USD3.42). Earlier in the day it sank to CNY23.80.

Tibet Summit and PowerChina, which was appointed engineering, procurement and construction contractor of the Argentinian mine in February for a fee of USD360 million, have decided to end their agreement in a friendly manner as they were unable to see eye to eye on fundraising issues, Lhasa-based Tibet Summit said yesterday.

Although the pair have carried out a series of on-site preparatory work since they penned the agreement in February, construction has not yet properly started, it added. No mention was made of the latest construction timetable.

Tibet Summit paid USD721 million for the development rights to the Sal de los Angeles lithium project in northern Argentina in November last year. The lithium plant was scheduled to be up and running by the end of next year with an expected output of 50,000 tons of battery-grade lithium carbonate a year. The first phase was supposed to start operations in February next year with an annual output of 20,000 tons of lithium carbonate.

But the project has been dogged by difficulties. In August, Tibet Summit fired one of the project’s two main equipment suppliers and brought in another company. The new firm then refused to sign a formal contract with Tibet Summit due to uncertainties arising from the termination of the first deal.

Editor: Kim Taylor