Vancouver lithium miner a takeover target in $400M bidding war with Chinese company

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Vancouver lithium miner a takeover target in $400M bidding war with Chinese company

A little Vancouver-based mining business with mining rights to among the greatest undeveloped lithium deposits in the world has actually ended up being the focus of an unforeseen bidding war.

An employee uses protective clothes while making lithium at a center in South America. Lithium is among the essential elements of making batteries for electrical cars and trucks. (Noah Friedman-Rudovsky/Bloomberg)

A little Vancouver-based mining business with mining rights to among the most significant undeveloped lithium deposits in the world has actually ended up being the focus of an unanticipated bidding war.

Lithium Americas Corp. made a $400 million United States stock-and-cash deal for fellow Vancouver-based business Millennial Lithium Corp. on Monday, exceeding a previous deal for the business made by China’s Contemporary Amperex Technology Co. Ltd., or CATL.

Millennial’s primary possession is its stake in the Pastos Grandes lithium mine in Argentina. Ultra-light lithium is a crucial part in batteries for electrical cars and trucks, need for which is taking off today.

The Argentinian task is thought to have sufficient lithium to produce 24,000 tonnes annually of battery-quality lithium carbonate for 40 years.

The brand-new deal of $4.70 per share defeats the $3.85 per share deal for the business made by CATL, which is the world’s biggest maker of lithium batteries and among Tesla’s significant providers.

As things stand, the world does not produce adequate lithium to make all the batteries that will be needed to fulfill dedications by car manufacturers to energize their fleets.

‘ No geopolitical angle at all’

CATL’s quote of $3.85 for the business in September was not the very first Chinese overture for the business, as it bested a previous takeover deal of $3.60 a share in July from another China-based company, Ganfeng.

The greater deal will doubtless come as some relief to political leaders in Ottawa, who would otherwise be required to select whether the deal from China-based CATL need to be permitted to go ahead on nationwide security premises.

Last year, at the height of diplomatic stress over Meng Wangzhou and the jail time in China of Michael Kovrig and Michael Spavor as an outcome of her detention at the Vancouver airport, Ottawa transferred to obstruct another Chinese takeover of a Canadian miner, TMAC Resources, which has cash cow in Canada’s North.

” There’s no geopolitical angle at all,” Lithium Americas CEO Jon Evans stated of his business’s deal. ” We simply take a look at this as an interesting future.”

While the marital relationship of 2 Vancouver-based miners would appear to be perfect at very first blush, expert Craig Hutchison at TD Bank thinks the story might not be over.

” CATL has a market cap of around $238 billion United States and is among the biggest battery makers worldwide,” he stated in a note to customers. ” Therefore our company believe there is possibility of a greater quote.”

Investors appear to believe that’s a possibility, too, as shares of Millennial Lithium were trading above the $4.70 deal rate on Tuesday, an indication they believe a greater deal might be coming.