(Yicai) Dec. 6 -- Ganfeng Lithium will transfer 35 percent equity in the Malian subsidiary that operates its spodumene mine in the country to the Mali government through paid and free means as the Chinese electric car battery materials giant prepares to put the Goulamina spodumene mine, which is one of the largest lithium mines in Africa, into production.

Ganfeng Lithium’s share price [SHE:002460] sank as much as 2.3 percent earlier today, but it was then lifted by a general rebound in the stock market and closed up 1.1 percent at CNY40.29 (USD5.50). The Shenzhen bourse’s benchmark index Shenzhen Component Index finished the day up 1.5 percent.

Ganfeng Lithium will hand over 10 percent of shares in its unit Lithium du Mali to the Malian government without charge, the Xinyu-based firm said yesterday, citing the equity transfer agreement penned by the two parties.

It will also divest a further 25 percent of Lithium du Mali’s equity worth West African CFA20 billion (USD32 million) to the government, that should be repaid at a later stage.

The Malian government will repay the cash portion of the equity transfer by releasing 20 percent of the dividends that it obtains each year to Ganfeng Lithium’s local subsidiary, and the full amount will be repaid within the validity period of the mining license, Ganfeng Lithium said.

By law, the Malian government holds 10 percent equity in any mining development project in the country, and has the right to hike this shareholding to a maximum of 35 percent through the acquisition of more shares once the price has been determined based on the reserves’ exploration data, Ganfeng Lithium said.

In return, the Malian government will provide preferential tax policies and government support to Lithium du Mali, create a stable business environment and guarantee the second phase of the mine as well as other projects invested by the company in the area, it added.

The first phase of the Goulamina spodumene mine, which is expected to produce 506,000 tons of lithium concentrate a year, has already started trial production and is due to be put into full production this month, Ganfeng Lithium said in November. The second phase should boost production to one million tons a year. 

Editor: Kim Taylor