China Natural Resources (CNR) has agreed to acquire mining company Williams Minerals’ lithium mine in Zimbabwe for $1.75 billion from Chinese investment holding group Feishang Group and civil engineering company Top Pacific (China).
Under the agreement, CNR is poised to acquire all interests in Williams Minerals in the second fiscal quarter of 2023, subject to the issuance of independent technical reports and the company’s full settlement of cash and restricted shares related to the transaction.
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As such, CNR plans to issue restricted shares, as well as a deposit of $35 million, as 50% of the deal consideration by 21 April. The remaining 50% of the consideration will include $140 million in the form of a promissory note as the first installment for a maximum consideration of $1.75 billion.
CNR noted, however, that the current terms of the transaction are still under review, with the company having completed its due diligence for the acquisition. Furthermore, until the consideration for each region of the lithium mine has been paid, Feishang Group and Top Pacific (China) will retain control over the site, controlling rights to exploration, sales of lithium, and revenue generation.
“We are pleased with the favorable outcome of our due diligence investigation of this potentially high-value lithium mine,” stated CNR Chairman, Wong Wah On Edward, who added that, “The payment of the deposit is a necessary step towards acquiring the exploration rights to the lithium mine, as all parties remain highly motivated to complete the transaction. We are excited to be moving forward and continue to see significant opportunities to leverage our mining expertise as we continue to execute our long-term business strategy.”
CNR’s acquisition of Williams Minerals is poised to serve as a significant development in the global lithium market as demand for the mineral – which serves as a vital component for batteries in electric vehicles, solar panels, and energy storage systems – continues to surge amidst growing global interest in renewable energy development.
Endowed with immense mineral wealth, Zimbabwe boasts Africa’s largest lithium deposits. The southern African country’s Bikita mine, situated approximately 300km south of its capital city of Harare, is estimated to contain approximately 11 million tons of lithium ore, while its Arcadia Lithium Mine is expected to reach an annual production of 2.5 million tons, thus resulting in a potential $3 billion in export revenue for the country.
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Feishang Group currently owns a 70% stake in Williams Minerals, with Top Pacific (China) holding the remaining 30% interest. Additionally, Feishang Group holds a controlling stake in CNR.