MinRes adds to global lithium production cuts amid downturn
The company will put its Bald Hill lithium mine in Western Australia under care and maintenance starting this week.
Rio Tinto (ASX, LON: RIO) agreed on Monday to buy a 15% stake in Australia’s Sovereign Metals (ASX: SVM) (LON: SVML) for A$40.4 million ($27.6 million), becoming a top investor in the critical minerals developer.
The move by the world’s second largest miner marks its first public step into the graphite sector, as it continues to boost its exposure to battery minerals.
Rio Tinto’s exploration arm – Rio Tinto Mining and Exploration – will subscribe for an initial 83.09 million shares in Sovereign Metals at a price of 48.6c each, reflecting a a 10% premium to the explorer’s 45-day volume weighted average share price.
The mining giant will also be granted an option over a further 34.54 million shares, with a 12-month option period, which could see Rio’s share in Sovereign increase to 19.99%.
Sovereign will use the funds to advance a definitive feasibility study for its Kasiya project in Malawi, where it aims to produce graphite for lithium-ion batteries and rutile for the pigment and titanium metal industries.
“This landmark agreement is a confirmation of Kasiya’s place as one of the most significant critical mineral discoveries in recent times,” Sovereign chairman Ben Stoikovich said in the statement.
The companies will collaborate on technical and marketing aspects for a graphite product from the project, with a focus on supplying purified graphite for the lithium-ion battery anode market.
Rio Tinto already produces titanium dioxide from rutile at its operations in Madagascar, South Africa and Canada. Titanium is used in solar panels, paint and aircraft because of its ability to withstand temperature extremes.
