Fulin Group eyes Chilean lithium for electric vehicles

Fulin Group eyes Chilean lithium for electric vehicles

Fri, 17/11/2017 - 11:22
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Yema EC70

Yema Auto has a range of electric cars, vans and buses. Photo: Yema Auto

Chinese conglomerate Fulin Group is exploring the possibility of investing in a Chilean lithium development partly owned by ASX-listed Lithium Power International, as it seeks new supplies for its electric vehicle manufacturing business.

Sydney-based Lithium Power International announced to the ASX today that Fulin Group had entered discussions with Chile’s Minera Salar Blanco regarding the Maricunga Lithium brine project.

The project is a joint venture between Lithium Power International, Canada's Bearing Lithium and a Chilean partner, and is considered to be one of the world’s highest-grade pre-production lithium mines.

Lithium Power International has a 50 per cent stake in the project, Bearing Lithium a 17.7 per cent stake, with the remainder owned by the Chilean joint venture partner.

A draft memorandum of understanding between Minera  and Fulin Group will explore possible collaboration in the Maricunga project, including a potential equity acquisition and a funding arrangement.

In return, Fulin Group is seeking to secure a direct project interest and full offtake rights to lithium produced from the project.

The Maricunga project is at the pre-feasibility study stage,

The MOU is non-binding, and any formal agreement will be subject to due diligence, agreement of commercial terms, legal documentations and all relevant approvals, Lithium Power International said in its statement to the ASX.

“The company announces our ongoing discussions, following an unsolicited approach from Fulin,” Lithium Power International chief executive Martin Holland said.

“This further validates the global nature and scale of the Maricunga project.”

One of Fulin Group’s subsidiaries, Sichuan Yema Automobile Industry Co, has been a leader in the design and development of electric passenger vehicles in West China.

Yema Auto has three manufacturing bases located in Chengdu and Mianyang and was established in the 1980s, before being acquired by Fulin Group in 2002.

The company has more than 40 models of passenger vehicles, buses and new energy vehicles, including hybrid vehicles, LNG-powered buses and electric buses and cars.

Its annual production capacity is 120,000 conventionally-powered cars and new energy vehicles.

Yema Auto announced earlier this year that it plans to invest ¥50 billion ($9.93 billion) into its Chengdu plant, increasing its annual production capacity to 100,000 vehicles.

Fulin Group has more than 15,000 employees and has more than 80 individual subsidiaries, in the manufacturing, real estate, hotel and energy investment sectors, as well as transportation.