Bacanora Lithium (LON:BCN) said on Wednesday that is selling 50% of its Zinnwald lithium project in Germany to Europe-focused miner Erris Resources (LON:ERIS) .
The transaction is a reverse takeover under which Erris will acquire Bacanora’s 50% stake in Deutsche Lithium GmbH in exchange for new shares in Erris.
Deutsche Lithium’s main asset, the Zinnwald project, is located in the heart of Europe’s chemical and car industries, about 35km from Dresden. It would be Erris’ first project in Germany.
Bacanora said the stake sale will allow it to focus wholly on bringing its Sonora lithium project in Mexico into production.
“The proposed transaction ensures that the development of Zinnwald, which is strategically located in Germany with immediate access to the German and wider European automotive and downstream lithium chemicals industries, can be accelerated and Zinnwald will get the full attention it deserves,” Bacanora’s chief executive, Peter Secker, said in the statement.
“Zinnwald is considerably further along the development curve than any of our existing assets,” Erris Resources chairman Anton du Plessis, said in a separate statement.
The company has projects in Ireland, Sweden, Norway and Scotland.
Prices for lithium, a key ingredient in electric car batteries, are expected to climb in two years, when shortages in the market caused by curtailed production and halted expansions start to emerge.
The white metal was recently added to the European Union’s list of critical materials in a move that seeks to reduce reliance on imported supply.