The tripling in lithium prices over three years is poised to fuel a multi-billion dollar rush of deals as major players jostle for dominance to supply the metal needed for the electric vehicle battery revolution.
China’s expected to lead a mergers and acquisition bonanza as companies seek to wrest more control of the market from Western rivals. The Asian nation accounted for more than half of global electric vehicle sales last year, which exceeded 1 million for the first time. And that’s just a taster of what’s to come as the government targets 7 million vehicles by 2025.
“You’ll see elevated activity this year driven mainly by the Chinese,” Chris Berry, a New York-based analyst on energy metals, and founder of House Mountain Partners LLC, said in an email. “The consolidation necessary in the space will start to happen now.”
China’s biggest supplier, Ganfeng Lithium Co., aims to deploy proceeds from a planned Hong Kong listing to extend an acquisition spree. It could raise about $1 billion, according to a person with knowledge of the details, who asked not to be identified because the information is private. The number of shares and proceeds haven’t been finalized pending approvals from the regulators, a company official said Tuesday.
Suitors including Tianqi Lithium Corp. are weighing offers for Nutrien Ltd.’s $4 billion stake in South America’s lithium giant Soc. Quimica & Minera de Chile SA. Tianqi has been considering a a Hong Kong share sale that could raise as much as $500 million, people with knowledge of the matter said earlier this month. Shaanxi J&R Optimum Energy Co. has held talks on a potential takeover of a new Australian miner.
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Disclaimer: Statements in this article should not be considered investment advice, which is best sought directly from a qualified professional.