Lithium miner Altura Mining Ltd [ASX:AJM] announced this morning that they have expanded their relationship with key Chinese shareholder Ningbo Shanshan Co. Ltd through a $22 million placement.
This placement will make Shansan the largest Altura shareholder, with a 19.4% stake in the company.
Altura issued a trading halt yesterday pending this announcement, and has seen their shares rise 4.55% since resuming trading upon market open this morning.
Altura Mining on the right path
In terms of the outcome of this strengthened partnership, Altura Managing Director James Brown believes it puts both companies on the path ‘key suppliers to growth in the global battery market’.
Shanshan is one of the largest integrated suppliers of lithium-ion battery materials in the world, securing around $14.5 billion of lithium battery material revenue in 2018. Their investment into Altura will help expand the Altura Lithium Project in the Pilbara region.
James Brown continued by saying ‘our relationship with Shansan is strong and open and we are continuing to formalise a strategic plan of supporting each other commencing with lithium concentrate supply’.
It’s a soothing thought to know that increasing supply is the top priority for this lithium mining venture, considering worldwide demand for lithium is expected to triple by 2025.
Speaking of, we here at Money Morning have created a free report on the lithium frenzy that is the ‘Battery Boom’, and why we think Australia is in prime position to make big from it. Check it out by clicking here.
What’s in store for AJM?
While any means of expansion in terms of lithium mining can be seen as a positive, the fact that Altura is gaining attention abroad should not be glossed over, for it shows they have given evidence of their potential.
The month of May saw record breaking production levels for the Lithium project, with daily spodumene concentrate production levels comfortably exceed the 640-tonne target, topping off at 742 tonnes in a 24-hour period.
The figures are so impressive, in fact, that Shansan isn’t the only Chinese lithium chaser on board. Earlier this month, Altura signed a Binding Offtake Agreement (BOA) with Shandong Ruifu, an established lithium materials producer.
The BOA involves 35,000 tonnes per annum of lithium concentrate for the next five years. It aims to ‘broaden and strengthen [Altura’s] customer base’, adding to the company’s other offtake agreements with Lionergy and Ganfeng.
So while year-on-year return is still in the red for Altura, it might be worth keeping this company in your line of sight if you’re looking for an Aussie stake in the lithium boom.
For Money Morning
PS: New to the lithium investment game? Check out our free report on ‘How to Invest in Lithium’ by clicking here.