December 12, 2019 / 3:29 AM / a month ago

Australia's Prospect Resources in talks to sell stake, lithium supply to Russia's Rosatom

(Reuters) - Australian lithium developer Prospect Resources Ltd (PSC.AX) said on Thursday it has signed a memorandum of understanding with a unit of Russia’s Rosatom that could see the latter buy a stake in Prospect as well as supplies of the sought-after metal.

The discussions are with Uranium One, a wholly owned subsidiary of the Russian state nuclear energy firm, and are incomplete and ongoing, Perth-based Prospect said in a stock exchange filing.

It didn’t disclose the size of the stake Uranium One might buy in Prospect, worth about A$26 million ($18 million) by market value before the accord was announced, nor financial terms of the potential lithium supply deal. Prospect shares jumped 14% on Wednesday following the company’s statement.

Though prices for lithium, a key component of batteries used in cell phones and electric vehicles, have seen a 50% drop since 2018, industry players see this as a buying opportunity to invest in companies associated with the white metal. Demand for lithium is widely expected to spike by 2025.

After a 90-day period to complete due diligence, Prospect said the agreement would allow Uranium One to negotiate acquiring at least 51% of Prospect’s future lithium production from its flagship Arcadia Lithium Mine in Zimbabwe.

Reporting by Nikhil Subba in Bengaluru; Editing by Kenneth Maxwell

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below