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Allkem (ASX:AKE) share price rises on agreement, project financing

The Allkem Ltd (ASX: AKE) share price has risen 5% after announcing two pieces of ASX news.

Allkem is one of the largest lithium businesses on the ASX.

Financing increase

Allkem has revealed its existing International Financing Corporation (IFC) project financing has been supplemented by an additional US$50 million with IDB Invest for Allkem’s Sal de Vida Project, which is in the Catamarca Province in Argentina.

IDB Invest is a member of the Inter-American Development Bank Group, a development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean. IFC is a member of the World Bank Group, the largest global development institution focused on the private sector in emerging markets.

In July 2023, IFC project financing for the development of Sal de Vida stage 1 was signed up for up to US$130 million.

The announced additional US$50 million has been signed on terms “materially consistent” with the IFC.

Impact Benefit Agreement

It has also announced that it has signed the Kapisikama agreement, an impact and benefit agreement, with the Grand Council of the Crees, the Cree Nation Government and the Cree Nation of Eastmain regarding the development and operation of the James Bay Lithium Project.

This project is located in northern Quebec, and the agreement will govern the relationship between the ASX lithium share and the Cree Nation through a sustainable development approach based on “mutual trust and respect during all phases of the project.”

Quebec government and Cree nation (Comex) approval of the ESIA also remains in progress.

The Kapisikama agreement provides for training, employment and business opportunities for the Crees and particularly the Crees of Eastmain at the James Bay Lithium Project, as well as Cree parties carrying out environmental monitoring during all phases of the project.

This agreement also ensures “financial benefits for the Cree parties on a long-term basis”.

Final thoughts on the Allkem share price

It’s good that the ASX lithium share continues to make progress towards its goals. More financing is good, while agreement with the Cree nation is also a good step.

Despite soaring 27% since 5 December, the Allkem share price is still down 36% from July. There could be more of a recovery to come if lithium prices improve, though I wouldn’t expect that in the short-term unless Chinese demand picks up.

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