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China’s Ganfeng Lithium, one of the world’s top producers of the commodity used in electric vehicle batteries, is acquiring a 50% stake in a special purpose vehicle that owns the Goulamina hard-rock mine in Mali for $130 million.

Ganfeng, which counts automakers Tesla and BMW among its customers,  will grant it at least half of Goulamina’s first-phase annual output, estimated in 455,000 tonnes of spodumene.

Mali’s government can take 10% of the equity free of charge and pay in cash for up to 10% more, the company said.

Ganfeng’s move mirrors Zijin Mining and Citic’s, which last week secured 100% of the copper production from Ivanhoe Mines’ recently-launched Kamoa-Kakula mine in the Democratic Republic of Congo (DRC).

It also follows a similar deal Ganfeng inked in December to buy spodumene concentrate from the Manono mine in the DRC for an initial five-year period. The company did not take an equity stake in AVZ Minerals, the operation’s owner.

Goulamina’s current license holder, Australia’s Firefinch (ASX: FFX), said in an the lithium project was one of the world’s largest undeveloped deposits, with 108.5 million tonnes of resources and high-grade spodumene concentrate.

It also said the project, which lies about 150 km (93 miles) by road south of Mali’s capital Bamako, had the potential to be one of the lowest cost producers.

Firefinch has said it intends to demerge Goulamina into a new ASX listed company. Ganfeng’s investment could speed up such plans.

Targeting hot spots

Ganfeng has been strengthening its investment and development capability in the lithium market over the past year. In early May, the company announced the acquisition of lithium explorer and developer Bacanora Lithium (LON:BCN), becoming the sole owner of the Sonora project in Mexico.

The mine is expected to begin production in 2023 and produce 35,000 tonnes of lithium per year once at full tilt.

The company is also exploring setting up a batteries plant in Argentina, where is developing the Cauchari-Olaroz lithium brine project. 

Beijing announced last year a development plan for the so-called new energy vehicle (NEV) industry in 2021-35. It is targeting a 20% share of NEVs in the country’s total vehicles sales by 2025, which supports the demand for battery materials in the long run.

����recent report by the International Energy Agency (IEA) recommends governments start stockpiling battery metals, noting that lithium demand could increase 40-fold in the next 20 years. IEA executive director Fatih Birol said this would become an “energy security” issue. China dominates lithium processing, while mine supply largely comes from Chile and Australia.