Tuesday, December 7, 2021

CATL rumoured to take stake in cobalt miner Jinchuan

According to a Chinese Media report CATL wants to take a 10% stake in Chinese cobalt miner Jinchuan Group International Resources and secure at least 3,000 tonnes of cobalt per year. CATL, however, denies this.

Reuters news agency had reported on Thursday, citing insiders, that both CATL and Huayou Cobalt were each to acquire around 10% of Jinchuan International. According to the insiders, the transaction would also be worth two billion Hong Kong dollars. This would be around $256 million.

Two sources “with direct knowledge of the matter” told Reuters that CATL had submitted an offer to Jinchuan to acquire 9.9% . This, they said, would allow the battery maker to secure at least 3,000 tonnes of cobalt per year.

Other informants said CATL had even wanted to take 20% to secure twice as much cobalt – but Jinchuan had rejected this.

CATL’s offer would value the company at around 20.2 billion Hong Kong dollars, or $2.59 billion. The battery maker would pay a premium of around 40% to its average share price over the past month, according to Reuters.

While CATL and Huayou immediately denied wanting to buy such a stake in Jinchuan, the cobalt producer, for its part, said it was in “preliminary discussions with independent third parties” about a possible new share issue. These discussions are said to be at an early stage. Furthermore there is said to have been no contact on the matter since 2 August 2021.

Jinchuan International mines cobalt in the Democratic Republic of Congo. It mined 4,158 tonnes of cobalt at its Ruashi mine in 2020. This is according to Reuters. The Company plans to increase production to 13,000 tonnes a year by 2023. Jinchuan International is listed on the Hong Kong stock exchange but belongs to the state-owned metal producer Jinchuan Group.

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