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Chengxin Lithium Group and Yahua Industrial Group Become Partners of Atlas Lithium and Ensure the Supply of Lithium Directly from Minas Gerais to Electric Car Leaders Such as BYD and Tesla.
The 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 spodumene concentrate production in the Jequitinhonha Valley, Minas Gerais. The companies are known for supplying lithium hydroxide for BYD and Tesla to build their electric cars. The partnership strengthens Atlas’s business ties with China, the world’s largest buyer of lithium, ensuring stable supply for the next five years.
Million-Dollar Deal with Atlas Lithium Boosts Lithium Production in Minas Gerais
The Chinese companies agreed to invest US$ 50 million in Atlas Lithium, equally divided into US$ 25 million each.
Of this amount, US$ 10 million was allocated as capital injection at US$ 29.77 per share, with a 10% premium over the average recent prices.
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The remaining US$ 40 million represents a non-dilutive prepayment, securing 80% of the company’s phase 1 assets in the Lithium Valley.
The estimated production is set to begin by the fourth quarter of 2024.
With the resources obtained, Atlas Lithium finances the first lithium production flow in Minas Gerais, estimated at US$ 49.5 million.
In this phase, the company plans to produce 150,000 tons of spodumene concentrate annually.
Chengxin and Yahua will each have access to 60,000 tons through new applications, thanks to the advance payment which grants them the right to receive the mineral for five years, though it does not fully cover costs, being deducted from the final amount.
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 ensures the commercial relationship with two strong companies from the leading buyer country of the product (lithium), China, for the medium term of five years. This was important to stabilize the company’s commercial strategy.”
Project Neves in the Jequitinhonha Valley Will Have Million-Dollar Investment and Create Many Job Openings
In addition to the agreement with the Chinese companies, Atlas Lithium reported that it is accelerating the production schedule of Project Neves in the Jequitinhonha Valley.
The company is contracting initial crushing and mining operations with local companies and implementing dense medium separation (DMS) technology.
The first two processing modules are under construction, with delivery expected in April 2024.
Project Neves has gained attention in recent months with positive results from metallurgical tests and drilling.
Atlas Lithium holds the largest concession area in the Lithium Valley, with a land package of over 240 km².
The investment of R$ 750 million in Project Neves aims to achieve an annual production of 300,000 tons of lithium concentrate by 2025.
Additionally, the mining company will invest R$ 250 million in the extraction of iron ore and ornamental quartzite stones in the Central region, generating nearly 1,300 jobs between the two ventures.
The partnership with the 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 vital commercial stability for the company’s continued growth in the electric car sector.
Learn About Lithium and Its Importance in the Industry
Source: Diário do Comércio
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