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China's Ganfeng to pay $130 million for stake in Mali lithium mine

06/14/2021 | 07:37pm EDT

(Reuters) - Ganfeng Lithium Co, one of the world's biggest lithium producers, said on Monday it would pay $130 million for a stake in the Goulamina hard-rock mine in Mali and take at least half of its first-phase output.

The purchase marks the Chinese firm's first investment in lithium mining in Africa as it seeks to expand production for the commodity used in electric-vehicle batteries.

Ganfeng, which has projects in China, Mexico, Australia, Argentina and Ireland, said in a filing it would take a 50% stake of a special purpose vehicle set up by Goulamina's current licence holder, Australia-listed Firefinch Ltd, that will fully own operating company Lithium du Mali SA.

The filing said Mali's government had the right to take 10% of the equity free of charge and pay in cash for up to 10% more.

Firefinch said Goulamina, which lies about 150 km (93 miles) by road south of Mali's capital Bamako, was "one of the world's highest quality lithium assets."

A feasibility study was completed last year but it was not immediately clear when production would start.

The project has 108.5 million tonnes of resources and high-grade spodumene concentrate, Firefinch said in a presentation last month. Spodumene is a lithium-rich mineral that can be converted into battery-grade lihium products.

Ganfeng said it would acquire offtake rights to 50% of first-phase annual production capacity of 455,000 tonnes of spodumene concentrate but may obtain 100% if it helps Lithium du Mali raise debt or gives financial assistance.

The Chinese company might help raise at least $64 million from banks or other financial institutions for development and construction of the mine, and might also opt to provide up to $40 million in direct financial assistance, the filing said.

Ganfeng signed an initial five-year deal in December to buy spodumene concentrate from the Manono mine in the Democratic Republic of Congo but did not take an equity stake.

This story corrects paragraph 3 to show Ganfeng has a project in Mexico, not Canada.

 

(Reporting by Tom Daly; Editing by Edmund Blair)

By Tom Daly


© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
AVZ MINERALS LIMITED -5.13% 0.185 End-of-day quote.8.82%
DOW JONES AFRICA TITANS 50 INDEX -0.30% 524.29 Delayed Quote.-0.80%
EURO / ARGENTINE PESO (EUR/ARS) 0.11% 114.7691 Delayed Quote.11.61%
FIREFINCH LIMITED -1.23% 0.4 End-of-day quote.122.22%
GANFENG LITHIUM CO., LTD. 1.92% 194.66 End-of-day quote.92.35%
S&P AFRICA 40 INDEX -0.32% 169.63 Delayed Quote.-1.87%
US DOLLAR / ARGENTINE PESO (USD/ARS) 0.00% 96.68 Delayed Quote.14.71%
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