After a major investor backed the deal, the Chinese takeover of a British miner of lithium is poised for success.
Ganfeng Lithium, Jiangxi’s headquartered Ganfeng Lithium, needs 75pc support to ensure its £285m purchase of Bacanora succeeds. If it fails, it will delist the company from the stock exchange.
It already has approval from shareholders for 45pc and currently owns 28.9pc. This brings the total to 73.9pc.
The Telegraph has learned that a major shareholder, controlling approximately 5% of the shares and who was previously holding out on the deal, is now backing the deal.
Despite fears that China will control more lithium supply, the takeover is happening. MPs claim the deal raises security issues, while retail investors accuse Ganfeng of undervaluing Ganfeng.
Chinese companies control around 90pc global rare earth mines and produce 80pc lithium-ion battery production.
The unidentified major shareholder said that they had thought about these issues, but that the deal was a “prisoner’s dilemma”.
This means that Bacanora will soon be removed from the London Stock Exchange.
MPs had previously asked the Government to investigate this deal. The situation is being monitored by ministers, who could still decide to intervene.
Ganfeng, a Shenzhen-listed company, needed 75pc support by the end of this year.
The 8% shareholding group of 500 Bacanora minority investors has opposed the plan, which would allow Ganfeng “to corner the entire space of lithium”.
Another hurdle could be regulatory approval in Mexico where Bacanora’s mines can be found. However, Ganfeng confirmed last Wednesday that this has been granted.
Ganfeng has already committed to purchasing 75pc lithium from Bacanora’s Mexican mine. The first phase went to Hanwa, the Japanese company.
Sir Iain Duncan Smith (the former leader of the Conservative Party) is expected to return to the Cabinet. He previously accused ministers of being “asleep at the watch” during the takeover.
