Corporate activity in the lithium space is growing momentum with Galaxy Resources lifting its stake in Alliance Mineral Assets Limited (AMAL) to 12 per cent via an investment of $22.5 million.

AMAL announced the placement along with a $10 million placement to Chinese battery maker Jiangxi Special Electric Motor Co.

Galaxy is flush with cash after Korean industrial giant POSCO paid US$280 ($405) million for the non-core northern tenements at the company’s Sal de Vida lithium brine project in Argentina.

The $32.5 million will fund continued upgrades of the processing facilities at AMAL’s flagship Bald Hill lithium-tantalum project south-east of Kambalda. Some of the cash will also be used for exploration and working capital.

AMAL, which is dual-listed on the ASX and Singapore Stock Exchange, last month signed an agreement with Jiangxi to pursue a lithium hydroxide plant in China.

Galaxy Chairman Martin Rowley said the company had been a minority shareholder in Alliance for some time, and welcomed the opportunity to increase its holding and become the biggest individual shareholder in the company.

“Galaxy recognises that the Bald Hill mine produces high-quality spodumene concentrates and believes that the tenements surrounding the existing Bald Hill Mine operations hold substantial value potential, that may be unlocked through further targeted exploration and work on resource delineation,” he said.

Mr Rowley said Galaxy would look to share its experiences from its flagship Mt Cattlin lithium mine near Ravensthorpe with AMAL.

AMAL Managing Director Mark Calderwood said the placements would enable the company to rapidly advance its plant upgrade and exploration activities with the aim of upgrading the resource base concurrently with proposed increased production rates.

Bald Hill produces a course-grade, low-impurity 6 per cent spodumene product, which it ships to customers in China through Esperance.

It expects to produce about 180,000 tonnes of the product this year.

The company posted a $212,000 operating profit in the March quarter after beginning production at Bald Hill just over a year ago.

AMAL owned 50 per cent of Bald Hill before it merged with its joint venture partner Tawana late last year.

Galaxy’s and Jiangxi’s investment in AMAL follows Wesfarmers’ $780 million takeover play for lithium explorer Kidman Resources and US chemicals giant Albemarle’s US$1.12 ($1.62) billion joint venture with Mineral Resources over its Wodgina lithium project in the Pilbara.

Image: Galaxy Lithium Operation, Kalgoorlie Mine.