Australian lithium developer Prospect Resources Ltd said on Thursday it has signed a memorandum of understanding with a unit of Russia’s Rosatom that could see the latter buy a stake in Prospect as well as supplies of the sought-after metal.
The discussions are with Uranium One, a wholly owned subsidiary of the Russian state nuclear energy firm, and are incomplete and ongoing, Perth-based Prospect said in a stock exchange filing.
It didn’t disclose the size of the stake Uranium One might buy in Prospect, worth about A$26 million ($18 million) by market value before the accord was announced, nor financial terms of the potential lithium supply deal. Prospect shares jumped 14% on Wednesday following the company’s statement.
Though prices for lithium, a key component of batteries used in cell phones and electric vehicles, have seen a 50% drop since 2018, industry players see this as a buying opportunity to invest in companies associated with the white metal. Demand for lithium is widely expected to spike by 2025.
After a 90-day period to complete due diligence, Prospect said the agreement would allow Uranium One to negotiate acquiring at least 51% of Prospect’s future lithium production from its flagship Arcadia Lithium Mine in Zimbabwe.
($1 = 1.4736 Australian dollars)
(By Nikhil Subba; Editing by Kenneth Maxwell)