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Block Chinese takeover of lithium miner, ministers told
Opponents fear allowing Bacanora Lithium to be bought risk giving Communist China even greater control over production of the element
By
Matthew Field
and
Matt Oliver
6 December 2021 • 6:45pm
A Chinese takeover of one of Britain's only listed lithium miners poses a threat to the national interest and must be stopped by ministers, MPs and shareholders have said.
Jiangxi-headquarted Ganfeng Lithium is on the cusp of securing enough support from investors in Bacanora Lithium to take control of the London-based business for £285m.
But opponents warned the plans risk giving Communist China even greater control over production of lithium, a highly sought-after element used in electric car batteries which is vital for the green revolution.
Chinese companies already own about 90pc of rare earth mines around the world and manufacture 80pc of lithium ion batteries.
A government source said ministers are monitoring the deal and that they could choose to intervene at a later stage, although nothing is expected imminently.
Sir Iain Duncan Smith, the former leader of the Conservative Party, demanded action.
“Ministers need to call this in. They have too often been asleep on the watch," he said.
"These are strategic industries and there is nothing more strategic now than rare earth materials, which are the oil of the 21st century.
“China has been snapping up reserves all over the world. We need to ensure this deal does not further increase the power of the undemocratic, dictatorial regime in Beijing.”
Ganfeng, which is listed in Shenzhen, said on Monday it had received support for the takeover from 72.9pc of shareholders. This includes the 28.9pc stake it already owned.
The company needs 75pc of shareholders to agree to the takeover by the end of the year in order for it to delist Bacanora from London’s Aim market.
The deal is being opposed by a group of 500 minority investors in Bacanora with 8pc of shares between them, who argue it would allow Ganfeng to “corner the entire lithium space”.
It must also secure approval from competition regulators in Mexico, where Bacanora's mines are located.
The takeover is going ahead despite government efforts to secure lithium supplies as part of efforts to build a domestic battery production industry. This has included part funding Cornish lithium production and building an extraction site.
Dawood Patel, who has been leading shareholder action against the Bacanora deal, said: “The UK Government seems to think Cornish lithium will solve all of our problems, but that is barely a third of what they will need.”
Sam Armstrong of the Henry Jackson Society called on the government to investigate the deal under the upcoming National Security and Investment Act, which gives ministers greater powers to block takeovers on security grounds.
“For the government, to do anything less than call-in this takeover would be a der
Vii - 17.29
I was reading recently that overall about 450,000 tons of tin have been taken out of the ground in Cornwall in the last 300 years until the last mine closed.
It really puts your tin potential figures into perspective, especially with new ore location & recovery techniques. It seems we've only scratched the surface of the potential.
That's without mentioning copper. Apparently, they were even producing 12,000 tons Cu per year in the 1700's.
Looking forward to the next set of drill results.......hope it is a nice Christmas present for us all.
Vii - 17:52
In relation to contributions, was referring to CUSN website , projects tab & CL tab, states:
“ CUSN will have a 25% free carried interest in the first project to have a bankable feasibility study completed on it, after which CUSN will be required to contribute its share of development costs or its interest will be diluted………” same terms for each subsequent projects at 10%. Hence my comments that CL/CUSN are potentially closely linked.
From companies house listing (25 Oct 2021) I see CUSN already own 6,158,138 shares in CL out of total 467M , but this will be diluted with TechMet’s first £9M tranche & then further with 2nd £9M. Given the Li,Cs, Rb quantities in Thursday’s JORC assessment, run potentially into £billions, albeit capex, not yet determined those shares could be worth more than 13.5/16p . We’ll only know at time of IPO placing.
Agree with your thoughts & think that with TechMet on board & with Q2 2022 IPO proceeds/ new investment they will move forward with brines at UD at pace.
Thanks Fira
We mustn’t also forget the copper potential for CUSN.
Interesting article below. Tin at all time high & copper to advance into a supercycle if Robert Friesland is right.
Cornwall will be producing so much Cu , Sn , Li ( and other rare earths) in the next 5-10 years on shore smelting and processing has got to be a no brainier for U.K. gov. Cornwall was once the world hub & it’s time will return again.
https://markettactic.com/copper-supercycle-when-bankers-start-using-terms-like-megatrend-its-time-for-investors-to-pay-close-attention-2/5011294/
Vii,MO,CK,Bubble, et al
I'm a very infrequent poster, but closely follow all the valuable research and opinion on CUSN and CL, with an open mind and find the depth of knowledge from all parties superb. Thank you all so much. The balance and differing views make this board almost unique and long may it continue.
From my own perspective & for what its worth, I think CUSN & CL will become ever more closely linked thru the royalty agreements, as CUSN will need to contribute financially to benefit from future income streams and run in parallel with their tin/copper focus.
Keep up the good work.
Vii
Do you think that Techmet's injection of funds will have any impact on CL's potential IPO in Q2 2022, as they now seem to have the cash they need up to pre-production? .............Will it be pushed back to end 2022, early 2023. Also a shareholder in CL ( as part of last crowdfund) & I'm on the whole positive about the experience Techmet brings to the table & good for future progress.
Grateful for any thoughts on TXSV today. After a bit of fluctuation around C$0.335 on opening, there seems to be no movement since (flat lining) and very thin volumes of 135k. Are people sitting on their hands waiting for news?
https://www.telegraph.co.uk/business/2021/11/15/car-makers-bet-battery-breakthrough-race-ditch-fossil-fuels/
Mention of two companies searching for lithium in Cornwall in DT article.
Should have said two companies have “found” lithium and establishing how much there is. All good news for CUSN .
https://investingnews.com/get-download/force-download/?dtd=137958
Very interesting lithium forecast . Cornish Lithium will in time feature as results are published and benefits flow thru to CUSN
I thinks so as well.........CUSN website banner shows TSX-V price at C$ 0.28, which converts to 17p, with AIM price showing at 13.84p.
There could be a big uplift on AIM price when market opens tomorrow.
I should have topped up!
Vii - some very interesting metrics on Neolithium project, which should provide good comparative information once CL produces it’s assessments on brine potential. Given CEO has stated CL has globally significant potential this could be massive. More great news for CUSN
https://neolithium.ca/project.php