Zijin’s Lithium Foray Adds to China’s Push for Battery Materials

Zijin’s Lithium Foray Adds to China’s Push for Battery Materials

The major Chinese gold and copper producer agreed to buy all outstanding shares of Neo Lithium for C$6.50 each in cash, according to an announcement on Friday. The Canadian miner’s core project is a high-grade brine operation in Argentina.

Zijin Mining Group Co. is making its first foray into lithium -- a key raw material for batteries -- with a C$960 million ($770 million) purchase of Neo Lithium Corp.

The major Chinese gold and copper producer agreed to buy all outstanding shares of Neo Lithium for C$6.50 each in cash, according to an announcement on Friday. The Canadian miner’s core project is a high-grade brine operation in Argentina.

Zijin’s venture into lithium highlights the intensifying race across China’s supply chain to lock in supply as the energy transition boosts demand and spurs a shortfall. The world’s biggest maker of electric-vehicle batteries, Contemporary Amperex Technology Co., will acquire Canada’s Millennial Lithium Corp. after trumping an offer from Ganfeng Lithium Co. CATL also holds an 8% stake in Neo Lithium.

Zijin shares jumped as much as 8.8% in Hong Kong on Monday, and are up 17% this year.

Neo Lithium’s brine project is “world class” and “is a good start for Zijin to enter the field of new energy minerals,” analysts at Citigroup Inc. wrote in a note.

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