Chinese company Huati Lighting Technology – a maker of street and outdoor lighting – is set to invest US$3 million in a controlling stake in a Mozambique-based lithium mining firm, according to reports.
Subsidiary Huati Energy International will acquire 85 percent of Kyushu Resources, a newly established entity whose sole holdings are a mine and exploration rights in the Gilé District in the northern province of Zambezia. The controlling stake will give Huati Lighting control over the mining, crushing, processing and transport of the extracted lithium.
Huati Lighting put the likely fixed-asset investment and working capital at up to US$10 million. Under current lithium carbonate prices, the project will likely gross US$103.6 million in annual revenue, with a profit of US$45.6 million once it reaches full capacity.
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The exploration rights, obtained 15 December and lasting five years, cover an area of more than 18,000 hectares in the northeastern part of the Alto Ligonha pegmatite belt. Pegmatite is a type of coarse-grained igneous rock that is enriched in rare elements, including lithium, for which it is the primary source.
Huati Lighting has not yet decided whether it will sink mines and extract the lithium ore itself or contract with a third party. It plans to ship the processed lithium concentrate through the port of Nacala, some 350 kilometres away. Most lithium mined in Mozambique and Zimbabwe goes through Beira Port due to its superior infrastructure links.
The lighting company has framed the purchase as an effort to improve its positioning in the new energy supply chain. Lithium is considered the single most important of the 51 critical minerals to energy transition, as it is a fundamental component of lithium-ion batteries, which are essential for storing variable renewable energy.
