(Yicai Global) Oct. 19 -- Sinomine Resource Group, a leading Chinese supplier of battery-grade lithium fluoride, is looking to expand its source of raw lithium ore and has entered discussions with Canada’s Grid Metals about the possible joint development of a local lithium mine.

Sinomine’s Canadian unit Tantalum Mining Corporation of Canada is planning to team up with Grid Metals, which holds a 75 percent stake in the Donner Lake Lithium Project in Manitoba, Sinomine said yesterday. Toronto-based Grid Metals acquired the stake from Tanco in 2016.

Grid Metals, which holds 2 percent equity of the project's net smelting proceeds as well as the right to purchase its ore and concentrate products on commercial terms, will provide Tanco with spodumene ore samples from the mine, Sinomine said, citing the preliminary agreement drawn up by the two parties.

Once the samples have been tested, the two parties will sign another deal whereby Grid Metals will supply spodumene ore to Tanco and Tanco will carry out smelting works and sell the spodumene concentrate. The two will then share the proceeds in an agreed manner. Further details will be worked out in subsequent agreements, it added.

The partnership will help Sinomine to expand its mineral resources, ensure supplies to Tanco’s new mineral processing plant and boost profitability, the Beijing-based firm said, which counts US electric car startup Tesla as one of its main clients.

Founded in 1999, Sinomine is also the world’s largest producer and supplier of caesium and rubidium and the only producer of cesium formate in the world. It is also an important provider of geological exploration technical services abroad.

Sinomine’s share price [SHE: 002738] was trading up 2.3 percent at CNY92.35 (USD12.80) as of 12.30 p.m. China time today.

Editor: Kim Taylor