China’s Ganfeng Lithium seals US$343 million mine deal in West Africa, gains control of one of the world’s largest sources
- The deal is to ‘secure supply of lithium resources, facilitate expansion and enhance its core competitiveness’, the company says
- Ganfeng will potentially buy out the mine subject to a mining code enacted last year, which gives the government of Mali the right to hold up to 35 per cent of the project
China’s Ganfeng Lithium has clinched a US$342.7 million deal to raise its stake in one of the world’s largest lithium projects in Mali, West Africa, securing additional resources to feed the voracious appetite of the Chinese battery supply chain as demand for electric vehicles grows at a furious pace.
Xinyu, Jiangxi province-based Ganfeng, which said its lithium production capacity was the world’s third largest and China’s biggest last year, has agreed to buy a 40 per cent stake in Mali Lithium, which wholly owns the Goulamina project, from Australia’s Leo Lithium, potentially buying out the company. However, under a new mining code enacted last year, the government of Mali has the right to hold up to 35 per cent of the project.
“The board believes that the transactions are in line with the company’s strategy of upstream and downstream integration and the further development in the new energy vehicle industry sector,” Ganfeng said in a filing to Hong Kong’s bourse late on Tuesday.
“It will also further strengthen the company’s control over Mali Lithium, secure supply of lithium resources, facilitate the business expansion of the company and enhance its core competitiveness.”
Analysts expect this move to help boost the company’s self-sufficiency in lithium production and reverse a profit margin squeeze brought about by falling product prices.