Text by Peng Suping
Editor丨Li Qin
Li Bin, who denounced the “speculative” rise in lithium prices, personally entered the lithium industry.
36氪 was informed that Weilai plans to invest in an ore mining company headquartered in Australia, Greenwing Resources Ltd, with a total amount of up to or exceeding 600 million yuan. With the financing, the company will accelerate the development of its San Jorge lithium project in Argentina.
In the past year, the price of lithium battery materials has soared, and the pressure has been transmitted from battery manufacturers to new energy vehicle companies. Battery manufacturers such as Ningde Times, Fudi Battery, and Xinwangda, as well as OEMs such as Tesla and Toyota, have all suffered to varying degrees. Binding upstream lithium mine suppliers, Weilai, which has always been generous with upstream and downstream layouts, is no exception. In the first half of this year, industry insiders told 36Kr that Weilai is intensively investigating lithium mines, “especially the salt lakes in South America.” Weilai has previously determined that it will develop its own batteries, and it is not surprising to enter the lithium mine.
Regarding this investment, NIO responded by saying: “We will evaluate and deploy upstream related to the core components of smart electric vehicles to ensure long-term competitive advantage.”
Weilai’s investment in Greenwing is divided into two parts. First, Weilai will pay 12 million Australian dollars (about 55.88 million yuan) to subscribe for 21.818 million shares placed by Greenwing at a price of 0.55 Australian dollars per share. After the subscription is completed, Weilai will hold about 12.16% of the shares of Greenwing. and hold a seat on the company’s board of directors;
Second, Weilai also obtained some call options, and the exercise price of the options is expected to be between US$40-80 million, or about RMB 286-573 million. According to the agreement, Greenwing will issue a detailed description of the San Jorge lithium project to Weilai, and Weilai can exercise the option within one year. According to the price of the highest exercised option, Weilai’s investment in Greenwing will exceed 600 million yuan.
When Weilai invested in Greenwing, the primary demand was to speed up the development of the San Jorge lithium project and give priority to becoming a customer of the project.
It is said that at least 80% of the payment for NIO’s subscription of shares will be used for the San Jorge lithium project; if NIO exercises the option, the payment will also be used for the outstanding option payment of the San Jorge lithium project, and 80% of the remaining income will be It will be used on a pro-rata basis for Greenwing’s research and development expenses and working capital.
The price of lithium salt remains high, and the price of batteries is also rising. It is not new for car companies to develop self-developed batteries and even extend their tentacles to the further upstream lithium mining and refining. Tesla will directly sign agreements with lithium miners over battery suppliers, and dig Zach Zens, a geologist from Rio Tinto Mining. There are also car companies that “lock in” upstream resources by investing in shares.
In addition to NIO, at the end of 2021, GAC Capital, a subsidiary of GAC Group, and Shangqi Capital, a subsidiary of SAIC Group, jointly invested 300 million yuan in Jiuling Lithium. Earlier, Great Wall Motors also obtained the underwriting rights of some lithium ore products by investing in the Australian lithium ore company Pilbara Minerals.
Car companies flock to upstream lithium mines, behind the contradiction and anxiety of capacity expansion and insufficient supply. Subject to the characteristics of the lithium mining industry, it is difficult for the influx of more capital to fundamentally alleviate the shortage of resources in the short term, but a deeper binding with the upstream will largely guarantee its own future supply and control costs—— This may be a common path for car companies to reduce costs and increase efficiency in the era of electric vehicles.
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NetEase News 36Kr
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