Battery Giant CATL Weighs Buying Stake in Miner Jinchuan

(Bloomberg) -- Contemporary Amperex Technology Co. Ltd. is considering buying a minority stake in Chinese miner Jinchuan Group International Resources Co., in the hopes of securing supplies of key battery metals, people with knowledge of the matter said.

Ningde, Fujian-based CATL, which is the world’s biggest electric vehicle battery maker, is in initial discussions with Jinchuan International about acquiring a roughly 10% stake in the miner, said the people, who asked not to be identified as the information is private. CATL could offer more than one and a half times Hong Kong-listed Jinchuan’s share price, the people said.

Shares of Jinchuan International jumped 16% Thursday after the Bloomberg News report, giving the company a market value of about HK$15.4 billion ($2 billion). The stock earlier surged as much as 90%. 

Deliberations are at an early stage and CATL could decide against the purchase, the people said. The deal may require government approval, they said. 

In a filing to the Hong Kong stock exchange Thursday, Jinchuan International said it had been in preliminary talks with “independent third parties” until about Aug. 2 on the possibility of the issuance of new shares, but they were pre-mature. As of date, “no concrete plan or formal agreement has been determined,” it said. 

CATL denies intention to acquire shares of Jinchuan International, a representative said, declining to comment whether the company had considered it or had discussions.

CATL, which supplies batteries to Tesla Inc., controls about 30% of the world’s electric vehicles battery market, ahead of South Korea’s LG Energy Solution which has around 25%. CATL’s board earlier this month approved a plan to sell as much as 58.2 billion yuan ($9 billion) worth of shares to expand its production capacity.

Jinchuan International operates projects in the Democratic Republic of Congo. The firm produced about 4,200 tons of cobalt in 2020, according to its annual report. Its Kinsenda underground mine produced over 30,500 tons of copper content in concentrates in 2020. 

The miner is developing the Musonoi project in the DRC, Jinchuan said the project has received the required internal and government approvals and construction is proceeding in an orderly manner, the annual report shows. The project is expected to produce 7,400 tons of cobalt and 38,000 tons of copper a year, according to an investor presentation. 

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With assistance from Bloomberg