NIO buys stake in Australian lithium firm Greenwing - PingWest

NIO buys stake in Australian lithium firm Greenwing

NIO buys stake in Australian lithium firm Greenwing

Rebbeca Ren

posted on 18 hours ago

The Chinese EV upstart officially joins the ranks of strengthening the control of upstream supply chains.

Australian lithium company Greenwing Resources today announced a strategic financing agreement with NIO in which the Chinese EV maker will buy a stake worth A$12 million.

Through its wholly-owned subsidiary Blue Northstar Limited, NIO agreed to subscribe to 21,818,182 Greenwing shares at a deemed issue price of A$0.55 per share.

According to the Australian firm, after the placement is finalized, NIO will own 12.16% of it and will be eligible to be nominated to the board of directors as long as it continues to hold at least 10% of the shares.

At least 80% of the proceeds from the placement will be allocated to the San Jorge lithium project, while the remaining will be used for general working capital purposes and costs of the proposed transaction, according to the company.

San Jorge is located in Argentina’s section of the famed “lithium triangle” which also includes adjacent regions of Chile and Bolivia.

As a result of the deal, Greenwing's shares traded in Australia closed up 65.31%, sending its market cap to A$48.9 million.

Although China has become the world's largest producer of lithium, with 80% of global lithium-ion battery production capacity, it still needs to source the bulk of raw lithium products beyond its borders.

Therefore, companies in China's mining, battery, and EV industries are snapping up lithium reserves all over the world to meet growing demands. By investing in Greenwing, NIO will obtain stronger control over the upstream supply chain.

Media outlets reported in June that BYD, China's biggest EV maker and key EV battery manufacturer, was in talks to buy 6 African lithium mines, which would provide enough lithium for the company's battery needs for the next decade.

CATL, the world's largest electric car battery manufacturer and a supplier for Tesla, and Ganfeng Lithium, the world's largest lithium metal producer by market value, battled aggressively for lithium salt lake projects in Argentina last year.