CATL Acquires Canadian Lithium Company Millennium for C$377 Million

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(Source: Getty Images)

The bidding competition over Canadian lithium company Millennium has come to an end as Chinese lithium giant, Contemporary Amperex Technology Co., LIMITED (CATL), won the battle.

Canadian-based lithium company Millennium Lithium Corp said on Tuesday that CATL agreed to acquire it for C$377 million ($297.55 million). CATL confirmed to media outlet Cailianshe that both sides signed an agreement on the acquisition of 100% equity.

Millennial possesses two world-class lithium recovery projects from salt lakes in Argentina, and currently has stores of about 4.12 million tons of lithium carbonate equivalent. CATL responded today that this acquisition is an important step to deploying a supply chain layout, and will provide a stronger guarantee for the long-term stability of lithium raw materials for CATL’s production needs.

According to the report, on September 28, CATH, CATL’s shareholding company, will invest $240 million in Manono, a lithium mine project in Africa. Australian mineral exploration company AVZ Minerals is the project developer, and says CATL will actually invest more than $4 million after the recheck of costs. In addition, the two companies may jointly evaluate the feasibility of developing lithium hydroxide facilities.

Public information shows that the Manono Project is one of the largest lithium resource projects in the world, with an estimated lithium resource reserve of 400 million tons and a high lithium oxide grade of 1.65%. The feasibility report published by AVZ in April 2020 suggests that the design capacity of the Manono project includes an annual output of 700,000 tons of lithium oxide with a design life of 20 years.

China has developed into the world’s largest manufacturer of electric vehicles in recent years and so the country has increasingly higher demand for lithium batteries. As a response to this increase in demand, CATL has expanded its production. Research suggests that CATL has set its production capacity target by 2025 to 500-600GWh, while other leading power battery enterprises have also upgraded their production capacity into 100GWh capacities.

In 2021, the NEV market and lithium batteries has been booming, and the prices of raw materials for lithium batteries in particular, have hit new highs. Lithium carbonate, lithium hydroxide, electrolyte, and other derivatives have all seen price increases in recent months. Lithium carbonate now costs about 190,000 yuan ($29,385) per ton, up by more than 50% over the past month, and up by 233% than that in early 2021, which was 57,000 yuan per ton.

SEE ALSO: CATL to Invest 13.5 Billion Yuan in Building a Lithium-Ion Battery Plant in Yichun, China

According to some reports, CATL directly or indirectly holds the shares of more than 20 upstream materials enterprises, and has been tightening its control over upstream raw materials of lithium batteries through share purchases, mergers, and acquisitions.

Like CATL, the leading battery enterprises at home and abroad, such as Guoxuan High-Tech, Eve Energy and LG Chem have also accelerated the layout of upstream resources.