CATL rumoured to take stake in cobalt supplier

CATL wants to take a ten per cent stake in Chinese cobalt miner Jinchuan Group International Resources and secure at least 3,000 tonnes of cobalt per year, according to a media report. CATL, however, denies this.

Reuters news agency had reported on Thursday, citing insiders, that both CATL and Huayou Cobalt were each to acquire around ten per cent of Jinchuan International. According to the insiders, the transaction would also be worth two billion Hong Kong dollars, or the equivalent of 218 million euros.

Two sources “with direct knowledge of the matter” told Reuters that CATL had submitted an offer to Jinchuan to buy 9.9 per cent. This, they said, would allow the battery maker to secure at least 3,000 tonnes of cobalt per year. Other informants said CATL had even wanted to take 20 per cent to secure twice as much cobalt – but Jinchuan had rejected this.

CATL’s offer would value the company at around 20.2 billion Hong Kong dollars, or 2.2 billion euros. The battery maker would pay a premium of around 40 per cent to its average share price over the past month, according to Reuters.

While CATL and Huayou immediately denied wanting to buy such a stake in Jinchuan, the cobalt producer, for its part, said it was in “preliminary discussions with independent third parties” about a possible new share issue. These discussions are said to be at an early stage, moreover, there is said to have been no contact on the matter since 2 August.

Jinchuan International mines cobalt in the Democratic Republic of Congo. In 2020, it mined 4,158 tonnes of cobalt at its Ruashi mine, according to Reuters, and plans to increase production to 13,000 tonnes a year by 2023. Jinchuan International is listed on the Hong Kong stock exchange, but belongs to the state-owned metal producer Jinchuan Group.