Huayou picks up Arcadia lithium project for US$422m with MinterEllison’s help

MinterEllison has assisted investment firm Huayou International Mining (Hong Kong) Ltd with its US$422m (approximately $612m) acquisition of a Zimbabwe-based hard-rock lithium mine from Perth-based battery minerals company Prospect Resources Ltd.

Pursuant to the transaction, Huayou has agreed to purchase Prospect’s 87% shareholding in the Arcadia lithium project, one of the world’s largest hard rock lithium resources. Huayou also undertakes an immediate payout of US$20m to a trust account nominated by Prospect as a deposit.

The share sale and purchase agreements were executed in December 2021, and the deal reached completion on 20 April. The acquisition strengthens and expands the production of battery minerals by Huayou’s parent company, Huayou Cobalt, for the electronic vehicle sector, according to MinterEllison.

The deal also marks Huayou’s second venture into lithium − a crucial component in rechargeable batteries − in the span of one week.

Partner Marcus Best led the MinterEllison team on the transaction. He was assisted by partners Bart Oude-Vrielink and Bryn Davis, as well as by lawyer Julia Sperac.

“We were pleased to support Huayou on this important multijurisdictional transaction,” Best said. “The successful outcome is a reflection of the growing value of the lithium industry globally, particularly given the increasing production of electronic vehicles.”