Key Minerals in Africa: Zhejiang Huayou Cobalt Seeks Full Control of Ghana’s First Lithium Mine

¬ Zhejiang Huayou Cobalt has launched a strategic move to acquire 100% equity in the Ewoyaa lithium project in Ghana by purchasing Atlantic Lithium for USD 210 million and entering into another agreement with Elevra Lithium

¬ This transaction resolves a prolonged deadlock between Atlantic and Elevra over the allocation of development costs for Ghana’s first lithium mine, which had persisted for several months

¬ Huayou will assume all future financing obligations for the USD 185 million project, which is planned to produce 3.6 million tons of spodumene concentrate over a 12-year period

Zhejiang Huayou Cobalt is seeking to strengthen its control over the Ewoyaa project—the future first lithium mine in Ghana. The Chinese company announced on Monday, May 11, a parallel agreement with Elevra Lithium. Just days earlier, Huayou Cobalt had declared its intention to acquire Atlantic Lithium, and this new agreement will facilitate its full acquisition of the asset.

The Ewoyaa project is currently operated as a joint venture. Elevra Lithium holds a 22.5% stake in the joint venture, while Australian operator Atlantic Lithium holds the remaining shares. Zhejiang Huayou Cobalt recently submitted a full-cash takeover offer to purchase all shares of Atlantic Lithium for USD 210 million. This acquisition will grant the Chinese company operational control. Meanwhile, the parallel agreement with Elevra Lithium aims to acquire all remaining minority stakes held by the shareholder.

Elevra Lithium plans to transfer all rights, obligations, ownership, and interests related to the Ewoyaa project to Zhejiang Huayou Cobalt. This transfer includes the right to take delivery of future spodumene production from the mine site. Specific financial terms of the transaction have not yet been disclosed by either party. The agreement allows the Chinese group to independently manage the project upon completion of all required procedures. As a result, Huayou Group will bear all development expenditures.

Atlantic Lithium outlined the financial transition details in a recent company announcement. The company stated: "If the agreement is completed, the conditions precedent relating to development costs shall be deemed satisfied or waived. Therefore, the Huayou Group will solely bear the project development costs until the balance of individual funding obligations stipulated in the project agreement."

This strategy goes beyond simple corporate consolidation. The acquisition aims to accelerate project implementation by eliminating development barriers. Atlantic Lithium and Elevra Lithium have been engaged in disputes for months over the distribution of project expenses. Current engineering plans forecast that the Ewoyaa mine will produce 3.6 million tons of spodumene concentrate. The project is expected to have a 12-year lifespan, with an initial capital investment of USD 185 million.

Several details of these agreements still need to be finalized by investors and regulators. Shareholders of Atlantic Lithium will vote on the acquisition proposal in November. The government of Ghana may closely monitor developments. The existing mining agreement guarantees the Ghanaian government a 13% non-interest-bearing equity stake in future mines.

Source: ecofinagency

Original: toutiao.com/article/1864968654745612/

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