China’s largest lithium battery maker has bought an 8.5% stake in Australian miner Pilbara Minerals (ASX:PLS), both companies said on Thursday, after falling prices caused mainly by oversupply drove the lithium producer to raise equity to fund working capital.
The move by Contemporary Amperex Technology (CATL) is part of a A$91.5 million ($61.8 million) capital raising that sees the Chinese firm buying the stake in Pilbara through a A$55 million placement. An additional A$36.5 million has been raised through an institutional placement at A$0.30 a share, the companies said.
China’s largest lithium battery maker has bought an 8.5% stake in Pilbara as part of a A$91.5 million ($61.8 million) capital raising
Pilbara, which exports a
lithium-rich spodumene concentrate, will also seek to raise A$36.5 million from
institutional investors and $20 million from retail shareholders at 30¢ per
share.
CATL, which makes electric vehicle batteries for car manufacturers including Toyota, BMW, Volkswagen and Honda, is currently building a factory in Germany.
“While there has been commentary talking down the current state of lithium markets, it has belied the significant interest we have continued to see from the strategic players in the lithium-ion supply chain and their focus on lithium raw material supply,” Pilbara Minerals managing director, Ken Brinsden, said in the statement.
“In particular, the focus is on the
quality and security of the lithium raw material supply and matching the raw
material demand growth to growth downstream in the lithium-ion battery supply
chain,” he noted.
Based in Fujian province in southeast China, CATL currently produces lithium-manganese-cobalt-oxide (NMC) batteries containing 50% nickel, 20% cobalt and 30% manganese.
The transition to battery power
will sharply increase demand for raw materials. Deployment of about 140 million
electric vehicles by 2030 will require 3 million tonnes more copper a year, 1.3
millions tonnes more nickel and about 263,000 tonnes more cobalt, according
to Glencore (LON:GLEN), a top producer of all three metals.
The Pilbara-CATL deal is subject to
approval by Chinese regulators and Pilbara shareholders.
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