Canada’s Neo Lithium Corp. has agreed to a $960-million acquisition by Chinese state-owned Zijin Mining Group Co. Ltd., a deal one security expert predicts will trigger an in-depth national security review by Ottawa.
Toronto-based Neo Lithium is developing a lithium mine in Argentina and hopes to eventually supply the silvery white metal to the electric vehicle industry. A 2019 prefeasibility study predicts the company’s 3Q mine could generate a 50-per-cent return on investment after it goes into production.
A key component in electric vehicle batteries, demand for lithium has exploded over the past decade with the increasing adoption of zero-emission vehicles and government commitments to reduce carbon emissions even more.
Earlier this year, the Canadian government designated lithium as a critical mineral, meaning it is essential to the economy. Late Friday, Neo Lithium agreed to be acquired in an all-cash transaction at $6.50 a share, an 18-per-cent premium to its closing price on the TSX Venture Exchange.
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