Yahoo Finance China claims victory in battle for British lithium miner
The Chinese takeover of a British lithium miner is on the verge of success after a major investor backed the deal.
Jiangxi-headquarted Ganfeng Lithium needs 75pc support for its £285m takeover of Bacanora to succeed, at which point it would delist the firm from the stock market.
It has already had approval from shareholders with 45pc of the stock, and owns 28.9pc of the shares itself, bringing the total to 73.9pc.
However, The Telegraph understands a major shareholder controlling about 5pc of the shares, and who had been holding out, will now back the deal.
The takeover comes despite fears that it will put even more of the world’s lithium supplies under Chinese control. MPs have claimed the deal raises security concerns, while a group of retail investors accuse Ganfeng of undervaluing the company.
Chinese companies already control about 90pc of rare earth mines globally and make 80pc of lithium ion batteries.
The major shareholder, who did not want to be identified, said they had considered these issues but that the deal represented a “prisoner’s dilemma”.
It means Bacanora is now almost certain to be delisted from the London Stock Exchange.
MPs have previously urged the Government to investigate the deal. Ministers are understood to be monitoring the situation and could still opt to intervene.
Shenzhen-listed Ganfeng needed 75pc backing by the end of this year.
It has faced opposition from a group of 500 minority investors in Bacanora controlling 8pc of shares, who argue it would allow Ganfeng to “corner the entire lithium space”.
Another potential hurdle was regulatory approval in Mexico, where Bacanora’s mines are located, but Ganfeng confirmed last week that this had now been granted.
Ganfeng has already agreed to acquire 75pc of lithium produced by the second phase of Bacanora’s Mexican mine, with the first phase going to the Japanese company Hanwa.
Sir Iain Duncan Smith, the former leader of the Conservative Party now tipped for a return to the Cabinet, has previously accused ministers of being “asleep on the watch” over the takeover.
