Battery metals explorer Askari Metals is looking to beef up the development of its Australian lithium assets after signing a strategic agreement with Shanghai-listed lithium-heavyweight Zhejiang Kanglongda Special Protection Technology. The new partner has a market cap of nearly US$1 billion and also holds a controlling interest of 51 per cent in Jiangxi Tiancheng Lithium Industry that specialises in extracting lithium sulphate solution.
Battery metals explorer Askari Metals is looking to beef up the development of its Australian lithium assets after signing a strategic agreement with Shanghai-listed lithium-heavyweight Zhejiang Kanglongda Special Protection Technology. The new partner has a market cap of nearly US$1 billion and also holds a controlling interest of 51 per cent in Jiangxi Tiancheng Lithium Industry that specialises in extracting lithium sulphate solution.
Zhejiang Kanglongda will assist the company with lithium chemical downstream processing techniques and opportunities in addition to providing access to capital for future development.
As part of the alliance, should Askari reach the mining stage, its Chinese partner will be provided with a preferred offtake position at market prices.
Notably, market prices for lithium have never been higher. On Tuesday Pilbara Minerals’ Battery Metal Exchange auction platform received pre-auction bids equating to a price of about US$7830 per tonne for its six per cent spodumene concentrate product. In comparison, the Exchange’s second auction back in July last year only netted bids equivalent to a price of just US$2500 per tonne.
Askari sees the latest development as a landmark agreement for the company that supports its aggressive exploration mandate and its continued exposure to the lithium sector.
The explorer is also considering spinning out its Australian copper and gold projects to allow for a leaner company as it looks to speed up its pursuit of battery metals with specific focus on lithium. Askari is currently planning to put its exploration pedal to the metal across its lithium portfolio with an initial spate of fieldwork due to commence at its recently acquired Myrnas Hill lithium project in WA.
Askari Metals Executive Director, Gino D’Anna said: “The lithium partnership agreement with Zhejiang Kanglongda signifies a landmark agreement for the Company and validates the potential of our lithium projects within the Northern Territory and the Eastern Pilbara region.”
“Pursuant to the agreement, we will work closely with Zhejiang Kanglongda in the development of lithium downstream products and importantly Zhejiang Kanglongda will provide us with access to key markets within China and provide Askari with access to capital for future development.”
The partnership agreement with the Chinese party relates to the company’s lithium-stacked portfolio that includes a trio of projects in WA’s eastern Pilbara region and a single project in the NT, Australia’s nascent lithium state. The distribution of its projects also allows for easy access to Australia’s northern ports and consequently Chinese markets.
Interestingly, the geological authority Geoscience Australia says that WA hosts about 99 per cent of the nation’s lithium resources and ranks the NT a distant second with about half a per cent. The WA-heavy nature of Askari’s portfolio seems to reflect these statistics. However, its single project in the NT could yet prove to be the dark horse.
The NT has even attracted the eyes of electric vehicle juggernaut, Tesla, who is looking to get a slice of ASX-listed Core Lithium’s Finniss lithium mine that it opened earlier this month. Notably, Finniss is Australia’s newest lithium mine and the only one operating outside of Western Australia. Earlier this year, Core and Tesla inked a binding terms sheet for the offtake of up to 110,000 tonnes of spodumene concentrate over four years from the mine. The market is anticipating further news surrounding the offtake as the pair have set October 26 – Wednesday next week – as the termination date of its current terms sheet. With the date approaching, Core’s shares have been on a steady rise throughout the week opening at $1.135 and rising to a high of $1.41 this morning.
With financial results from the third quarter of 2022 now coming into the light, the NASDAQ-listed EV juggernaut Tesla reportedly missed analysts’ revenue expectations citing a shortfall of sales due to delivery and production bottlenecks. Notably however, on a conference call following the financial results, Tesla Chief Executive officer, Elon Musk said “we expect to sell every car that we make for as far into the future as we can see.”
And every one of those cars will need a lot of lithium…
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
