Leo Lithium (ASX:LLL) has finalised a significant agreement worth $520 million with a prominent African mining service firm, Corica, to advance its lithium project in Mali, a West-African nation.
This strategic move by Leo Lithium aims to capitalise on the growing demand for lithium amidst the critical mineral cold war, which has intensified the competition for securing key mineral resources.
The Goulamina project, situated in the southern region of Mali, is at the forefront of Leo Lithium’s development plans.
The recently signed five-year contract with Corica encompasses six months of pre-production activities, setting the stage for the subsequent mining operations.
Leo Lithium’s management is optimistic about the collaboration, viewing it as a crucial milestone in their pursuit of achieving first spodumene concentrate production by the first half of 2024.
In May, Leo Lithium received a significant financial boost when Ganfeng, China’s leading lithium producer, injected $106.1 million into the company.
This investment was aimed at accelerating the expansion of Leo Lithium’s African project, as well as strengthening their position in the global lithium market. As part of the deal, Ganfeng acquired a 9.9 percent stake in Leo Lithium and expressed interest in constructing its first processing plant outside China, possibly in Europe, to handle the output from the Goulamina mine.
The market response to Leo Lithium’s recent developments has been positive, with the company’s shares witnessing a 144 percent increase since the beginning of the year.
However, on Thursday, the company’s stock experienced a 4 percent decline, closing at $1.20. Nonetheless, Leo Lithium maintains a market capitalisation of $1.18 billion, signifying investor confidence in its long-term growth potential.
Leo Lithium’s commitment to developing the Goulamina project aligns with the increasing global demand for lithium, a vital component in the production of electric vehicle batteries and other renewable energy technologies.
The Mali mining operations, supported by the substantial investment and expertise of Corica and Ganfeng, are poised to contribute significantly to Leo Lithium’s ambitions of becoming a key player in the lithium market.
As the critical mineral cold war continues to unfold, Leo Lithium’s strategic partnerships and proactive approach to securing vital lithium resources position the company to capitalise on the rapidly evolving dynamics of the global energy transition.
With its sights set on commercial production in the near future, Leo Lithium is on track to play a crucial role in meeting the escalating demand for lithium in a sustainable and environmentally conscious manner.