Leo Lithium, backed by Chinese giant, inks $520m deal to mine in Africa

afr.com:

Leo Lithium, an ASX-listed lithium explorer backed by China’s biggest producer of the commodity, has signed a $US348 million ($520 million) contract for the construction of its major development in Mali.

Six weeks ago, Ganfeng tipped $106.1 million into Leo Lithium, securing a 9.9 per cent equity stake, to fast-track the expansion of the project.

Simon Hay, managing director and CEO of Leo Lithium. AFR

Chinese firms are racing to secure minerals in Africa amid a scramble for resources, as the United States and its allies – including Australia – attempt to create their own supply chains and processing facilities.

Leo Lithium is a joint venture partner with Ganfeng in the Goulamina hard rock lithium project, located in the south of Mali.

Leo Lithium’s managing director, Simon Hay, said on Friday that the appointment of Corica, an African mining services contractor, to construct and operate the mine was “another major step” towards achieving its first spodumene concentrate production in 2024. Mr Hay said Corica, which has major contracts with miners in Mali, Côte d’Ivoire and Burkina Faso, had been appointed for a five-year period, including six months of pre-production.

Before joining Leo Lithium, Mr Hay ran Galaxy Resources and oversaw its $5 billion merger with Orocobre, to create the world’s fifth-largest lithium producer, Allkem, in 2021.

Shenzen-listed Ganfeng operates six lithium-processing facilities and is considering building its first plant outside China to process the output from the Goulamina mine in Europe, Mr Hay said on Friday.

The lithium giant is mulling its first processing plant outside China in a nod to the producer seeking to diversify its portfolio amid the geopolitical risks that dominate the sector.