MinRes to put lithium mine on ice, to cut 300 jobs
The company will put its Bald Hill lithium mine in Western Australia under care and maintenance starting this week.
A police probe into the billionaire siblings behind a fast-growing Chinese battery company has put a fresh spotlight on governance risks in the country.
Shares of Yunnan Energy New Material Co. plunged by as much as the 10% daily limit in Shenzhen for two consecutive days after the Chinese maker of paper packaging and lithium battery films unveiled its chairman and vice chairman were under police surveillance. The company said the probe was related to an unidentified matter, without elaborating, and that its operations remained normal.
The two-day selloff has erased more than $1.3 billion in wealth for the two executives, according to the Bloomberg Billionaires Index. Chairman Paul Xiaoming Lee and Vice Chairman Li Xiaohua control more than 45% of Yunnan Energy with their families, and their combined fortune now stands at $7.3 billion.
The two brothers are adding to a list of billionaires that have been probed in recent years by Chinese authorities, sometimes disappearing for months or years before reemerging to face a trial. One of the latest examples, the chairwoman of flavoring and fragrances maker Huabao International Holdings Ltd., lost half of her wealth as the stock tanked by a record when news broke in January she was being investigated for suspected disciplinary violations.
Local ratings firm Shanghai Brilliance Credit Rating & Investors Service Co. said it would monitor the impact on the shares and convertible bonds, while Credit Suisse Group AG cut its stock rating to the equivalent of a sell. Citigroup Inc. said the absence of the executives could threaten the firm’s governance and operations if prolonged, though it still recommended buying the shares, citing Yunnan Energy’s “unrivaled” market leadership.
The firm has benefited from the boom in electric vehicles and batteries in recent years, counting Panasonic Holdings Corp., Samsung SDI Co. and BYD Co. among its clients. Yunnan Energy’s revenue jumped 86% to 8 billion yuan ($1.1 billion) in 2021. It said in May it was planning a $916 million plant in Ohio, and it announced the following month a 5.2 billion yuan joint venture to set up battery film production lines with Contemporary Amperex Technology Co.
The executive brothers acquired a majority stake in Yunnan Energy’s predecessor in 2010. It began trading on the Shenzhen stock exchange in 2016 and the shares surged through a peak in September 2021. Now they’re heading for their worst weekly slump in five years, even though they pared their losses to 7% on Wednesday.
Lee holds US nationality, while Li is a Chinese citizen with a residential permit in another unspecified country or region, according to the company’s 2021 annual report.
(By Venus Feng, with assistance from Pei Yi Mak)
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