Bacanora Minerals eyes the European electric car industry with its acquisition of a German lithium business
Shares in Bacanora Minerals have lifted today on news the firm has gained a foothold in Europe's lithium market.
The resource developer has agreed to acquire a 50 per cent stake in and joint operational control of a German lithium project.
The Alternative Investment Market (Aim)-listed firm's shares were up 8.96 per cent at 83.9p in afternoon trading.
The Zinnwald Lithium Project, owned by solar panel giant SolarWorld, will provide Bacanora with an entry point into the rapidly growing market for lithium in Germany and Europe as a whole, driven by the automotive, renewable energy storage and chemicals industries.
Lithium is a small but invaluable component of rechargeable batteries that's currently used in small-scale devices such as mobile phones. A report published today by Visiongain forecasts the lithium-ion battery market will generate revenues of $3.1bn in 2017.
Bacanora chairman Mark Hohnen called Zinnwald a strategic asset. "The project fits with both our corporate strategy to develop and operate integrated lithium projects to produce high value lithium products, and also the commercial overlay which drives our acquisition strategy."
The company's operations are based in Mexico, where its main focus has been the Sonora Lithium Project. Production is set to begin there in early 2019.
Hohnen said Sonora continues to sit at the heart of the firm's portfolio, but Zinnwald "provides us with exposure to an exciting new geographic market and adds hard rock mineralisation to our portfolio."
"We believe that with an ownership structure that is accretive to Bacanora, Zinnwald will further facilitate our ambition of becoming an independent global lithium operating group," he said.