Recently, Hainan Mining announced that it intends to increase the capital of Kodal Minerals PLC and its wholly-owned subsidiary Kodal Mining UK with US$118 million in cash, so as to obtain the Bougouni lithium mine assets in Mali. After the transaction is completed, Hainan Mining will realize the industrial synergy between the upstream resources of the new energy industry and lithium salt processing, and accelerate the industrial layout of the three main tracks of iron ore + oil and gas + new energy.

Layout of African lithium mines

According to the announcement, Xinmao Investment Co., Limited, a wholly-owned subsidiary of Hong Kong Xinmao Investment Co., Ltd., a wholly-owned subsidiary of Hainan Mining, as the investment subject of this transaction, intends to sign additional issuance agreements and capital increase agreements with KOD and KMUK, and relevant shareholders The relationship agreement is to subscribe for 14.81% of the shares issued by KOD to Xinmao Investment through cash of US$17.75 million, and to hold a 51% stake in KMUK with cash of US$94.34 million. At the same time, in order to achieve the same proportion of loan provided by KOD to KMUK, Xinmao Investment intends to provide KMUK with a shareholder loan of US$5.66 million.

KOD is a British listed company focusing on the exploration and development of lithium mines in West Africa, especially in Mali. Its core project is the Bougouni lithium mine project, and it also has a number of gold mine exploration rights in Mali and Côte d'Ivoire. After the transaction is completed, KMUK will hold all of KOD's lithium assets in Mali, including exploration rights and mining rights.

The Bougouni lithium mine project consists of three mining areas: Sogola Baoule, Ngoualana and Boumou, with a total ore resource of 21.31 million tons and an average grade of lithium oxide of 1.11%. At present, the project has obtained formal environmental approval and a mining license will be obtained at the end of 2021. The validity period is 12 years, and the mining right covers an area of 97.2 square kilometers. The development conditions are relatively mature, and the construction can be started at any time.

The main product of the mine is spodumene, which is mainly used as raw materials for basic lithium salt products such as industrial-grade/battery-grade lithium carbonate, industrial-grade/battery-grade lithium chloride, and industrial-grade/battery-grade lithium hydroxide. Driven by the demand for new energy batteries in the future, it is expected that the market demand for related products will remain high. Editor/He Yuting