Chinese battery manufacturing giant, Zhejiang Huayou Cobalt, has described the acquisition of Zimbabwe’s lithium investment portfolio as strategic in strengthening its grip on the global battery manufacturing value chain.
The company, which is listed on the Shanghai Stock Exchange with a market capitalisation of over 22 Billion United States Dollars, on Friday finalised a deal to acquire a controlling stake in Zimbabwe’s Arcadia Lithium Mine at a value of USD 422 000 000.
The mining giant has been operating two copper and cobalt mines in the Democratic Republic of Congo since 2007 and is investing in four nickel and cobalt projects in Indonesia.
It is the Zimbabwe’s deal that, However, has seen the company focusing on plans to build a battery manufacturing arm.
“The strategic deal is further creating that opportunity for us to go further in spreading our wings globally, remember Arcadia has all what it takes in terms of lithium deposits or reserves it is our ability to sink further capital that will enable the strategic nature of the deal to be a success, while we take our mission to commit to the agreement the resource aspect in Zimbabwe is further testimony of us getting more of market value into the battery value chain industry on a global scale or basis,” said Mr Stenford Moyo Zhejiang Huayou Representative in Zimbabwe.
Under the deal, the Chinese giant is paying 377 million United States dollars to Prospect Resources for its 87 percent stake in Arcadia Lithium, with minority shareholders getting 44,2 million United States dollars for their combined 13 percent interest.
Arcadia project requires over 190 million United States dollars at a time Prospect Resources had to date spent 25, 7 million United States dollars, and parties to the agreement consider the deal important given that Prospect Resources was finding it difficult to access money from global financial markets.