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Roskill: Chinese companies step up their pursuit of lithium resources

China is stepping up its pursuit of control of the lithium supply chain, underpinned by the rapid growth of its lithium-ion battery industry building on agressive policy surrounding electric vehicle sales, according to metals and mining consultancy Roskill.

One of China’s largest lithium-ion battery manufacturers, CATL, recently acquired North American Lithium from past owner Jilin Jien Nickel Industry. Jilin Jien, which bought the Québec Lithium mine and lithium carbonate conversion plant from its creditors in 2016, is understood to have entered bankruptcy in China and had struggled to raise the funds to complete the re-commissioning.

CATL has been importing spodumene concentrate from Quebec since December 2017, presumably trialling its conversion potential in China.

Meanwhile, Altura Mining confirmed it had been in discussions with Shaanxi J&R Optimum Energy, another of China’s lithium-ion battery behemoths and competitor of CATL, regarding a potential control transaction. News had circulated that Optimum, currently Altura’s largest shareholder and off-taker of 100ktpy of spodumene concentrate, was seeking to take control of Altura and its Pilgangoora project that is currently in the commissioning phase.

Nextview New Energy, underwritten by Tibet Summit Resources and Tajik-China Mining, has completed its previously announced acquisition of Lithium X Energy for approximately C$257 million (US$197 million), despite worries over the deal’s likelihood following reports by another Nextview target—Bacanora Minerals—over delays to an investment.

Nextview takes control of the Sal de los Angeles lithium brine project in Argentina, containing over 2Mt LCE of resources. Nextview also takes over the Arizaro lithium brine project and has consolidated Lithium X’s Clayton Valley holdings with those held by Pure Energy, in the process, becoming Pure Energy’s largest shareholder; it now holds approximately 19% of Pure Energy’s shares.

Major battery producer BYD was already invested in domestic lithium sources but, with limited opportunities, its competitors are following suit overseas. China inc. faces headwinds, however, with Chile’s minerals development agency Corfo asking antitrust regulators to block the sale of a 32% stake in SQM to Tianqi Lithium on competition grounds.

Roskill believes Corfo’s statement on competition is exaggerated but clearly the goal is to prevent control of Chile’s strategic and now expandable Atacama asset falling into Chinese hands, a situation that the governments of Argentina and Australia also face but, perhaps, of more concern to ex-China automakers that have been slower to ensure lithium supply security.

Comments

SJC

We have lithium in the U.S. but we don't refine it just like we don't refine rare earth elements, not profitable enough.

HarveyD

Leave it China as with 1000 other things?

China coud buy the local firms doing it and export the raw and/or finished produce?

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