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Battery giant CATL weighs buying stake in miner Jinchuan

26th August 2021

By: Bloomberg

  

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Contemporary Amperex Technology (CATL) is considering buying a minority stake in Chinese miner Jinchuan Group International Resources, in the hopes of securing supplies of key battery metals, people with knowledge of the matter said.

Ningde, Fujian-based CATL, which is the world’s biggest electric vehicle battery maker, is in initial discussions with Jinchuan International about acquiring a roughly 10% stake in the miner, said the people, who asked not to be identified as the information is private. CATL could offer more than one and a half times Hong Kong-listed Jinchuan’s share price, the people said.

Shares in Jinchuan International jumped as much as 90% after the Bloomberg News report. The stock rose 37% as of 1:15 p.m. Thursday, giving the company a market value of about HK$18-billion ($2.3-billion).

Deliberations are at an early stage and CATL could decide against the purchase, the people said. The deal may require government approval, they said. Representatives for CATL and Jinchuan International didn’t immediately respond to requests for comment.

CATL, which supplies batteries to Tesla, controls about 30% of the world’s electric vehicles battery market, ahead of South Korea’s LG Energy Solution which has around 25%. CATL’s board earlier this month approved a plan to sell as much as 58.2-billion yuan ($9-billion) worth of shares to expand its production capacity.

Jinchuan International operates projects in the Democratic Republic of Congo (DRC). The firm produced 4 200 t of cobalt in 2020, according to its annual report. Its Kinsenda underground mine produced over 30 500 t of copper content in concentrates in 2020.

The miner is developing the Musonoi project in the DRC, Jinchuan said the project has received the required internal and government approvals and construction is proceeding in an orderly manner, the annual report shows. The project is expected to produce 7 400 t of cobalt and 38 000 t of copper a year, according to an investor presentation.

Edited by Bloomberg

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