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Zijin Mining is in talks to amass a controlling stake in lithium producer Zangge Mining as certainly one of China’s most globally expansive miners seeks to develop its push into the vital steel.
The corporate has been in discussions with Tibet Zangge Enterprise Capital, a serious shareholder in Zangge, in accordance with a Hong Kong inventory change submitting on Friday.
It stated the “potential acquisition continues to be topic to the approval of the board of administrators” in addition to the “formal signing of an acquisition settlement”.
Zangge, which has a market capitalisation of Rmb46.6bn ($6.4bn), relies within the western province of Qinghai, the place salt lakes enable for low-cost extraction of minerals. It additionally produces potash, a potassium compound used as fertiliser.
State-backed Zijin, certainly one of China’s greatest gold and copper miners, is well-known to worldwide buyers on the again of a wave of world acquisitions and goals to begin producing lithium from a mine in the Democratic Republic of Congo subsequent 12 months.
Its home and worldwide explorations for the steel, which performs a vital position in batteries for electrical autos however has lately fallen sharply in value, comes as Chinese language companies proceed to ascertain a dominant foothold throughout provide chains associated to the fast-growing EV battery sector.
Carmakers similar to BYD and Nio have accelerated their worldwide plans, with outbound investment surging final 12 months on the again of the clear power sector’s rising abroad presence.
Funding has prolonged from South America to Europe, the place Chinese language battery producer CATL final month stated it might construct a €4.1bn lithium battery factory in Spain alongside carmaker Stellantis.
Costs of lithium carbonate surged in 2021 and 2022 however have since fallen to about $10,000 a tonne, near ranges previous to the increase, amid considerations round extreme capability.
Albemarle, the world’s largest lithium producer, stated in November it was not economically viable to pivot provide of lithium to the west due to low costs and excessive working prices.
In a separate assertion to the Shenzhen inventory change, the place it’s listed, Zangge pointed to a possible “change in management”. Buying and selling in its shares have been suspended on Friday. Shares of Zijin rose 3.4 per cent in early buying and selling.
In November, Zijin acquired a gold mine in Peru and in 2019 purchased Canadian miner Continental for $1bn as a part of business consolidation. A 12 months earlier, it purchased Canadian copper miner Nevsun Assets for $1.4bn and has expanded its copper operations in Africa.
Further reporting by Wang Xueqiao in Shanghai
