Looks like the articles have started up again prior to Friday. Another take from the Chinese perspective:
Lithium carbonate has risen 10 times in 2 years!Chinese and Australian companies battle for control of world's largest lithium mine
2022-07-12 09:05 HKT
In recent years, under the background of the transformation of the global energy structure, new energy vehicles have ushered in rapid development, and the field of power batteries has also risen. As an important raw material for the production of power batteries, lithium ore has become a scarce resource in the world, known as "white oil" ".
Lithium carbonate has risen 10 times in 2 years!
Lithium ore resources are scarce, and lithium carbonate has skyrocketed 10 times in 2 years
Some experts have analyzed that the penetration rate of new energy vehicles will continue to increase in the future. It is expected that by 2025, the global penetration rate of new energy vehicles may exceed 25%, which is expected to drive the global power battery shipments to 1550GWh.
According to the current mainstream technical route of the power battery industry, lithium is the most important raw material in the industrial chain, and there is no substitute. In this context, once there is a shortage, the price of lithium may increase exponentially. With the thickening of the downward safety margin and the full opening of the upward elasticity, lithium, as the "white oil" in the new era, may usher in a major revaluation.
Take lithium carbonate as an example, its price has skyrocketed 10 times in two years. Relevant data shows that in June 2020, the price of lithium carbonate was only 41,900 yuan per ton, but since last year, the price of lithium began to soar. By March this year, the price of lithium carbonate had exceeded 500,000 yuan per ton . The ton mark, although there has been a pullback since then, is still at a high level.
According to the data of the business agency, on May 20 this year, the price of lithium carbonate was 450,000 yuan per ton.
Lithium carbonate has risen 10 times in 2 years!
Now all countries have realized the scarcity of lithium resources. Under the influence of such market supply and demand, some people in the industry expressed concern that lithium prices may usher in further rises.
The scarcity of resources has opened up the imagination of lithium prices, and the competition for lithium resources in the industry chain has become more and more intense under the background of high prices.
Chinese and Australian companies stage a battle for lithium mines
As the old saying goes, "going all over the world with reason", now, I am afraid it will become "going all over the world with lithium". Under the background of tight lithium resources, companies from China and Australia are staged a "competition for the world's largest lithium mine." war".
The Manono Lithium Mine (Manono) located in the Democratic Republic of the Congo (DRC) is one of the largest lithium-rich LCT (lithium, cesium, tantalum) pegmatite deposits in the world that can be mined open-pit, with a total resource of 401 million tons, containing 1.63% of lithium oxide. AVZ Mining is an Australian-listed lithium mining company that owns control of Manono.
Dathcom is Manono's local operating entity and holds a mining license under the DRC government scheme.
Lithium carbonate has risen 10 times in 2 years!Chinese and Australian companies battle for control of world's largest lithium mine
AVZ claims to hold a 75% stake in Dathcom, and the remaining 25% is held by Cominiere, a state-owned mining company in Congo.
However, on May 11, AVZ voluntarily suspended trading on the Australian Stock Exchange and has not resumed trading so far. The reason is that there are a lot of rumors in the market that it is about to lose control of Manono.
Let's first understand how Manono's equity is allocated:
The Manono lithium mine was initially held 70% and 30% by Dathomir and Cominiere, respectively. In 2016, AVZ bought a 60% stake in Dathmir, thereby gaining control of the Manono lithium mine. During this period, Dathmir also acquired a 5% stake in Cominiere.
Lithium carbonate has risen 10 times in 2 years!
Later, AVZ said it bought 5% and 10% of Dathmir in July 2019 and August 2021, respectively, bringing the stake to 75%. And Dathmir quit the project. So far, AVZ believes that it has achieved "absolute" control over the Manono lithium mine.
In May of this year, AVZ disclosed to Australian investors that it would sell a 24% stake in the Manono Lithium Mine to CATH (Suzhou Tianhua Times), a private Chinese company , and one of the shareholders behind the new buyer CATH is the midstream and downstream lithium mine The leading manufacturer of the industry chain, CATL.
For AVZ, this was a great event. First of all, the transaction price is definitely a huge profit for AVZ. AVZ sold its 24% stake to CATH for as much as $240 million. The consideration for AVZ to acquire a 10% stake in Dathmir is only $15.5 million, a premium rate of 545%!
In addition, if the transaction is carried out according to this plan, AVZ can still retain control of the Manono lithium mine (51% equity).
Another shareholder, Cominiere, which holds 25% of Manono Lithium, is planning to withdraw from the project and transfer 10% of its shares to the Congo (DRC) government. AVZ had intended to use the controlling shareholder's "right of first refusal" to buy the remaining 15% from Cominiere.
Lithium carbonate has risen 10 times in 2 years!
Halfway through, Cheng Yaojin - Zijin Mining
But will it really go so well? Of course not, here we have to unlock a new character - Zijin Mining.
On May 9, Zijin Mining issued a press release stating that it owns a 15% stake in the Manono Lithium Mine, and said that in September 2021, its subsidiary had signed an agreement with Cominier to acquire a 15% stake in the Manono Lithium Mine.
This time, AVZ was dumbfounded. According to its original plan, before the transaction with CATH, AVZ already held 75% of the equity, and only sold 24%. With 51% of the equity, it can still use the "right of first refusal", and then buy from Cominier. 15% stake, raising its stake from 51% to 66%. .
However, Zijin Mining said that after AVZ agreed to sell 24% of its shares to CATH, it has lost its controlling shareholder status, so it is not to mention the "right of first refusal".
Lithium carbonate has risen 10 times in 2 years!
Why do you say that? Zijin Mining stated in a press release that according to the information it obtained, AVZ's subsequent acquisition of 15% of the shares from Dathmir has been invalidated by the court, which means that its shareholding ratio in Manono Lithium Mine has always been 60%.
According to court documents, one-third (5%) of Dathmir's 15% stake sold to AVZ in 2019-2021 was borrowed from Cominiere in 2018, and Dathmir's sale did not require the lender's consent.
The Congolese (DRC) local court recognized the fact that Cominiere had lent the equity, and therefore ruled that Dathmi's sale of 15% of the equity to AVZ was illegal.
In this way, it is equivalent that Cominiere will use 15% of its 30% stake (the original 25% plus the 5% returned by Dathcom) to complete the transaction with Zijin Mining, and 10% will be transferred to the Congo (DRC). ) Government, 5% sold to another buyer "MMCS".
Lithium carbonate has risen 10 times in 2 years!
In this regard, AVZ has not compromised on this. AVZ said that it has filed legal proceedings against Zijin Mining and "deeply discussed" with the Congolese government the validity of the 15% stake it acquired.
The battle for control of the lithium mine is not over yet, but it is clear that the Congolese government and courts are supporting China.
Short-selling agency Boatman also believes that AVZ has a slim chance of winning the lawsuit, because the court has ruled that its purchase of a 15% stake in Dathmir is invalid as early as the end of 2021, but AVZ has been hiding the lawsuit from Australian investors while appealing, And insisted that he has a 75% controlling stake in the Manono lithium mine, and because of this, the agency is also shorting AVZ recently.
Lithium carbonate has risen 10 times in 2 years
It can be seen that some Chinese companies have already taken active actions to ensure the supply of lithium energy. At present, the contradiction between supply and demand in the lithium industry is still prominent. I am afraid that the price of lithium ore may usher in a continuous rise in the future, and this battle for lithium ore It may continue for a while.
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