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(Sharecast News) - Andrada Mining announced on Friday that it has received final approval from the Namibian Competition Commission for its earn-in agreement with Sociedad Química y Minera de Chile (SQM), clearing the way for the partnership to proceed.
The AIM-traded firm said the agreement granted SQM the right to acquire up to a 50% stake in Grace Simba Investments, Andrada's subsidiary holding the Lithium Ridge licence.
It said that with regulatory approval secured, the formation of a joint development committee for Grace Simba Investments would now begin.
SQM would pay the remaining balance of a $1.5m participation fee to Andrada, while an initial $7m investment was expected over the next 18 months, giving SQM a 30% interest in the subsidiary at the end of the first stage.
"We are delighted to receive the Competition Commission's approval for the earn-in agreement with SQM," said chief executive officer Anthony Viljoen.
"This approval is the final component required for us to fully launch what will be a transformative partnership with one of the world's largest lithium chemicals producers.
"The agreement will significantly accelerate our lithium to market strategy."
Viljoen described it as an "exciting development" for both Andrada and Namibia, noting SQM's up-to-$40m foreign direct investment would both expedite the development of the spodumene-rich Lithium Ridge as well as drive socio-economic growth in the Erongo region.
"This strategic partnership will create direct and indirect employment opportunities, enhance local skills development, and strengthen local procurement of goods and services.
"With this approval secured, our exploration team is fully prepared to execute the first phase of the agreement.
"This is undoubtedly a pivotal moment in the company's trajectory to becoming a leading African producer of critical raw materials."
At 1450 GMT, shares in Andrada Mining were down 1.33% at 2.05p.
Reporting by Josh White for Sharecast.com.
