Lithium miner Bacanora eyes slice of German electric car market

 

Lithium powers electric car batteries

By Jon Yeomans

21 FEBRUARY 2017 • 6:00AM

An Aim-listed miner is hoping to drive off with a slice of the European electric car market by reviving an old lithium mine near Dresden.

Bacanora Minerals(LON: BCN), which is developing a lithium project in Mexico to cater for the Asian market, now wants a toehold in Europe, and believes it can feed the German auto industry by reopening the Zinnwald mine in southern Saxony.

The company will pay €5m (£4.26m) for a 50pc stake in Zinnwald, and put another €5m into a feasibility study over the next 18 months. Should the project pass muster, it will have the option to buy out its partner, SolarWorld AG, for a further €30m.

Demand for electric vehicles could grow to 10-20pc of the entire car market by 2025, said Bacanora chief executive Peter Secker. Lithium is used in batteries for electric cars, and has seen its price surge since the start of the year, he added.

“Every major auto manufacturer has a number of hybrid vehicles in production or in planning,” Mr Secker said. “We think demand for lithium is going to grow very strong for the next few decades.”

SolarWorld, a manufacturer of solar panels, brought Bacanora on board when it realised it needed help developing the Zinnwald project. The mine, in the former East Germany, began life as a tin operation before switching to lithium production in the 1950s. It has been suspended since lithium prices collapsed in the 1990s.

Bacanora wants to revive the Zinnwald lithium mine in southern Saxony

Bacanora would use processing techniques developed at its Sonora mine in Mexico in its German operation, Mr Secker said, though he would not be drawn on potential customers for the product. “We’ve reviewed the German car market and those discussions will continue over the next two years.”

Sonora, which is expected to enter production in 2019, remains the focus for the company, Mr Secker said. However, he added: “Bacanora plans to grow into an international lithium group. We’ll take it stage by stage, and look at assets as they come up.”

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