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Galaxy Resources is anticipating that its Sal de Vida lithium mine in Argentina will enter production in time for a surge in lithium demand.

The company has been battling weak lithium demand, which was exacerbated by COVID-19’s market impact, according to Galaxy’s final report for the half-year ended 30 June 2020.

Galaxy’s Mt Cattlin operation in Western Australia, which produces a lithium concentrate (spodumene) product, was forced to scale back its operational plans for this year due to the sobering market conditions.

The short-term outlook for lithium remains uncertain for Galaxy due to COVID-19.

“With increasing pressure on lithium prices, producers and developers are slowing or stopping new mines and expansion projects,” Galaxy said.

However, the company remains optimistic about the medium to long-term outlook for the commodity, with its Sal de Vida lithium project in Argentina expected to come online alongside the next rise in lithium demand.

Galaxy said stimulus packages across the European Union and China were set to deliver a lithium demand surge through a boost in electric vehicle manufacturing.

“Automakers remain committed to electrifying their fleets and many of the majors have recently reinforced their relationships with Tier 1 battery manufacturers,” Galaxy said.

Sal de Vida design phase and piloting are under way, with the project expected to complete operational readiness in the second half of 2022, followed by a ramp up in 2023.

The flagship project represents a Tier 1 lithium brine asset, with a project life in excess of  40 years.