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Chengxin Lithium Group and Yahua Industrial Group become partners of the mining company Atlas Lithium and guarantee the supply of lithium directly from Minas Gerais to electric car leaders such as BYD and Tesla.
Mining company Atlas Lithium announced a significant strategic agreement with two Chinese giants, Chengxin Lithium Group and Yahua Industrial Group, for the sale of shares and part of the production of spodumene concentrate in Vale do Jequitinhonha, Minas Gerais. The companies are known for providing lithium hydroxide to BYD and Tesla to build their eletric cars. The partnership strengthens Atlas' commercial ties with China, the world's main buyer of lithium, ensuring a stable supply for the next five years.
Atlas Lithium's million-dollar deal boosts lithium production in Minas Gerais
The Chinese companies agreed to invest US$50 million in Atlas Lithium, divided equally into US$25 million each.
Of this amount, US$10 million was allocated as a capital contribution at US$29,77 per share, with a premium of 10% in relation to the average recent prices.
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The remaining $40 million represents a non-dilutive prepayment, securing 80% of the company's phase 1 assets in Lithium Valley.
Production is estimated to begin by the fourth quarter of 2024.
With resources obtained, Atlas Lithium finances the first lithium production flow in Minas Gerais, estimated at US$49,5 million.
At this stage, the company plans to produce 150 thousand tons of spodumene concentrate annually.
Chengxin and Yahua will have access to 60 thousand tons each through new applications, thanks to the advance payment that gives them the right to receive the mineral for five years, although it does not fully cover the costs, being deducted from the final value.
Rodrigo Menck, advisor to the mining company, highlighted the strategic importance of the agreement: “This is a strategically relevant agreement for Atlas Lithium, as it guarantees the commercial relationship with two strong companies from the main purchasing country of the product (lithium), China, on average period of five years. This was important to stabilize the company’s commercial strategy.”
Neves Project in Vale do Jequitinhonha will have million-dollar investment and the opening of many job vacancies
In addition to the agreement with Chinese companies, Atlas Lithium reported that it is accelerating the production schedule for the Neves Project in the Jequitinhonha Valley.
The company is contracting initial crushing and mining operations with local companies, and implementing dense media separation (DMS) technology.
The first two processing modules are under construction, with delivery scheduled for April 2024.
The Neves Project has gained prominence in recent months with positive results from metallurgical tests and surveys.
Atlas Lithium holds the largest concession area in the Lithium Valley, with a land package of more than 240 km².
O investment of R$ 750 million in the Neves Project aims to reach an annual production of 300 thousand tons of lithium concentrate by 2025.
Furthermore, the mining company will invest R$250 million in the extraction of iron ore and quartzite ornamental rocks in the Central region, generating almost 1.300 jobs between the two projects.
The partnership with Chinese companies Chengxin Lithium Group and Yahua Industrial Group places Atlas Lithium in a strategic position in the global lithium market, ensuring not only production but also commercial stability vital to the company's continued growth in the lithium sector. eletric cars.
Learn about lithium and its importance in industry
Source: Diário do Comércio
