(Reuters) – Lithium Americas Corp is buying Argentina-focused Millennial Lithium Corp for $400 million in stock and cash, eclipsing an offer from China\u2019s Contemporary Amperex Technology Co Ltd (CATL) as demand for the electric vehicle (EV) battery metal surges worldwide.<\/p>\n
The deal, announced on Wednesday, comes a day after a deadline expired for CATL to respond to the Lithium Americas offer for Millennial here). CATL is the world’s largest EV battery manufacturer, but does not produce any lithium.<\/p>\n
Shares of Lithium Americas rose 3.5% on Wednesday, while shares of Millennial fell about 3%.<\/p>\n
Both companies have tussled in recent weeks over Millennial, though Lithium Americas said it believes the fact that it is based in Canada worked to its advantage.<\/p>\n
\u201cThis transaction is a lower regulatory risk than CATL or another Chinese company. Like it or not, there\u2019s critical mineral strategies by the U.S., Canadian and Australian governments that could have played a part in this,\u201d Jon Evans, the Lithium Americas chief executive, told Reuters.<\/p>\n
Evans said he does not expect CATL to challenge the deal.<\/p>\n
\u201cThis is a great expansion opportunity for us in Argentina,\u201d he said, adding the company hopes to start construction within two years. Once operational, the project is expected to produce 24,000 tonnes annually of battery-quality lithium carbonate for 40 years.<\/p>\n
Lithium Americas has been building the Cauchari lithium project with Ganfeng Lithium Co – its largest shareholder – near the Millennial lithium deposit, which made the buyout even more appealing, Evans said.<\/p>\n
\u201cI don\u2019t think you\u2019re going to see opportunities like this going forward, at least not at valuations that we have here,\u201d he said.<\/p>\n
Lithium Americas is also developing the Thacker Pass lithium mine in Nevada, though that project has faced legal setbacks here. The company will publish a definitive feasibility study on Thacker Pass in 2022, Evans said.<\/p>\n