Grandma cobalt is going to buy grandpa lithium, too.
Today (December 22), the 100 billion market value listed company Zhejiang Huayou Cobalt Co.Ltd(603799) (603799, SH) announced that the company plans to acquire lithium mines in Zimbabwe, Africa, with a total transaction amount of US $422 million. After the acquisition, the subsidiary Huayou international mining (Hong Kong) Co., Ltd. (hereinafter referred to as Huayou international mining) will hold 100% equity of Zimbabwe prospect lithium Zimbabwe (PVT) Ltd (hereinafter referred to as prospect lithium mining company) and related creditor’s rights under the inter company loan agreement.
As of June 30, 2021, the total assets of the company are USD 1.968 million and the net assets are USD -918 million; In fiscal year 2021, the operating revenue was USD 18000 and the net loss was USD 872000. The target has not yet made money, Zhejiang Huayou Cobalt Co.Ltd(603799) won it, which once again shows the popularity of lithium ore.
“Cobalt Lord” also wants to buy lithium
According to Zhejiang Huayou Cobalt Co.Ltd(603799) announcement, Huayou international mining, a subsidiary of the company, signed pmpl share sale and purchase agreement and minority shareholder share sale and purchase agreement with pmpl, natural persons Kingston kajese, tamari trust and other relevant parties respectively.
Through its subsidiary Huayou international mining, the company plans to acquire 87% equity of prospect lithium mining company held by Singapore prospect minerals Pte Ltd (hereinafter referred to as pmpl), a wholly-owned subsidiary of Australian listed company prospect Resources Ltd (hereinafter referred to as prospect Resources Ltd or the seller’s guarantor), and the inter company loan agreement for us $378 million The related creditor’s rights of foreground company to foreground lithium mining company (hereinafter referred to as related creditor’s rights).
At the same time, the company also plans to acquire 6% equity of prospect lithium mining company held by natural person Kingston kajese and 7% equity of prospect lithium mining company held by tamari trust family trust for us $44.2477 million through Huayou international mining. The total transaction amount is US $422 million. After the acquisition, Huayou international mining will hold 100% equity of prospect lithium mining company and related creditor’s rights under the inter company loan agreement.
Prospect lithium owns 100% interest in Arcadia lithium mine in Zimbabwe. As of October 2021, the JORC (2012) standard resources of Arcadia project announced by prospect company are 72.7 million tons, the grade of lithium oxide is 1.06%, the grade of tantalum pentoxide is 121ppm, the amount of lithium oxide metal is 770000 tons (lithium carbonate equivalent is 1.9 million tons), and the amount of tantalum pentoxide metal is 8800 tons. However, the proven lithium carbonate equivalent of the lithium mine is 440000 tons. It is understood that Arcadia lithium mine is located in mashonalan District East of Zimbabwe, about 38 kilometers away from the capital Harare.
Picture of reserves and resources of Arcadia project source: Zhejiang Huayou Cobalt Co.Ltd(603799) announcement screenshot
According to the optimization feasibility study report on the one-time annual ore processing capacity of 2.4 million tons published by Arcadia project in December 2021, the project has a construction period of 2 years, a production life of 18 years and an annual output of 147000 tons of spodumene concentrate. According to the rough calculation of 1:6 lithium carbonate, the corresponding capacity of lithium carbonate is 24500 tons. According to the feasibility study report of Arcadia project prepared by Lycopodium in December 2021, the after tax NPV of the project is US $929 million.
Zhejiang Huayou Cobalt Co.Ltd(603799) said that the acquisition will help the company strengthen the layout of upstream lithium resources and enhance the resource reserves required for lithium battery new energy materials. As a leading listed company of “cobalt Lord”, Zhejiang Huayou Cobalt Co.Ltd(603799) this rush into lithium ore also confirms the shortage of upstream resources again.
According to the target data, as of June 30, 2021, the company had total assets of USD 1.968 million and net asset loss of USD 918 million; In fiscal year 2021, the operating revenue was USD 18000 and the net loss was USD 872000.
Lithium mines in Africa usher in the “ore rush”
Last week, the reporter of the daily economic news had a dialogue with the general manager of a lithium enterprise. He told reporters that the lithium resources in Australia and South America are already clear cards. In the future, the undeveloped increment of lithium ore is in Africa. “There is no shortage of lithium ore in the world, and there are some unexplored resources in Africa”.
Not only Zhejiang Huayou Cobalt Co.Ltd(603799) , Chengxin Lithium Group Co.Ltd(002240) (002240, SH) has previously won a lithium mine in Africa. On November 3, Chengxin Lithium Group Co.Ltd(002240) announced that Shengyi lithium International Co., Ltd., a wholly-owned Hong Kong Sun company of the company, plans to acquire 51% shares of Max mind investment Limited (hereinafter referred to as Max mind Hong Kong) for us $76.5 million (about 490 million yuan).
Max mind Hong Kong, through its wholly-owned Zimbabwean Wesson company, has the mining license for a total of 40 rare metal blocks of sabixing Lithium Tantalum mine project in Zimbabwe, with a total block area of 2637 hectares. Up to now, Chengxin Lithium Group Co.Ltd(002240) has explored the resources of five mining right blocks, and the total identified ore resources are 6.683 million tons, including 1.231 million tons of proved resources, 2.534 million tons of controlled resources and 2.918 million tons of inferred resources.
On June 14, Ganfeng Lithium Co.Ltd(002460) (002460, SZ) announced that the board of directors agreed to the wholly-owned subsidiary GFL International Co., Limited acquired 50% equity of Dutch SPV company at the price of US $130 million, so as to obtain 50% equity of goulamina lithium project in Mali, Africa.
In fact, the hot expansion of downstream battery plants drives the demand for upstream. Insiders said that the supply of lithium concentrate is tight. According to the news from the overseas market, the capacity release of lithium concentrate is less than expected.
Pilbara minerals Ltd, one of the largest lithium miners in Australia. Recently, the lithium shipment forecast was significantly reduced, which further exacerbated the supply tension of key raw materials for lithium batteries of electric vehicles. The Perth based company cited a series of reasons for the decline in shipments, including delayed production and blocked capacity expansion, as well as unexpected shutdown and skilled labor shortage.
(Daily Economic News)
