Chinese car marker Great Wall Motor Co Ltd., said it has taken a 3.5% stake in Australian lithium miner Pilbara Minerals Ltd., to help secure supplies of a key mineral for its electric vehicle development plans.
Great Wall said it would take the equity interest in Pilbara for around AUD28 million ($22m) through its wholly-owned Hong Kong-registered subsidiary Billion Sunny Development Ltd.
Great Wall has agreed an initial five-year off-take deal with Pilbara for 75,000 tonnes a year of spodumene concentrate from Pilbara’s Pilgangoora Lithium-Tantalum project (pictured) in Western Australia, which is expected to start production in 2018.
Pilbara said in an Australian Securities Exchange announcement that Great Wall also has the option to secure a further 75,000 tonnes a year of the mineral if it provides Pilbara with $50m of debt financing for the project’s expansion.
Pilbara’s CEO Ken Brinsden said the deal marked “the first direct investment by an automobile manufacturer into an upstream supplier of lithium raw materials”.
Brinsden said the move “highlights the strategic importance for the global automotive sector of securing access to large scale, consistent, high quality sources of battery raw materials in low-risk jurisdictions”.
A recent World Bank report said the global trend towards using clean energy systems such as battery storage technology would see “heightened demand” for minerals and metals including lead and lithium.
