European Lithium partner Obeikan Investment Group signs deed of assignment and executed key shareholders agreement
\nAgreement progresses plans to jointly develop and operate a lithium hydroxide processing plant in Saudi Arabia
\nJV now waiting on CRML to sign both the deed and shareholders agreement <\/p>\n
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Special Report:<\/em> European Lithium is closer towards becoming a lithium chemicals player after equal partner Obeikan Investment Group took a key step to advance their goal of developing and operating a lithium hydroxide plant in Saudi Arabia.<\/strong><\/p>\n In a major step forward, Obeikan has agreed to a deed of assignment and executed a shareholders agreement for the development and operation of the plant.<\/p>\n European Lithium\u2019s (ASX:EUR)<\/strong><\/a> 50:50 joint venture with Obeikan is developing, constructing and commissioning a lithium hydroxide processing plant in Saudi Arabia.<\/p>\n The JV company will have an exclusive right to purchase spodumene mined from Critical Metals Corp\u2019s (NASDAQ:CRML<\/strong>) Wolfsberg lithium project in Austria.<\/p>\n EUR holds 83.03% of the issued shares in NASDAQ-listed CRML.<\/p>\n Additionally, the lithium hydroxide plant is expected to be developed to meet the initial capacity and product specifications based on the\u00a0binding long term supply agreement with BMW<\/strong><\/a> that was originally reached by EUR but is now under CRML\u2019s purview.<\/p>\n \u00a0<\/p>\n Partner Obeikan Group has now signed the deed of assignment and executed the shareholders agreement that paves the way for the establishment of the JV company Arabian New Energy.<\/p>\n Obeikan Group is a leading private industrial company operating in multiple fields including glass, paper and plastics with a growing focus on harnessing the power of technology and digital transformation across all its operations. The group is operating in the Kingdom of Saudi Arabia and MENA and owns more than 20 factories and 25 companies with over 3,000 employees.<\/p>\n Work is now progressing on incorporating the new company, which will occur when it is successfully registered and approved by the Kingdom of Saudi Arabia\u2019s regulatory authorities<\/p>\n Once CRML signs both the deed and shareholders agreement, they will both be binding on all parties.<\/p>\n The establishment of Arabian New Energy and its lithium hydroxide plant advances the goals of Saudi Arabia\u2019s Vision 2030 strategy.<\/p>\n While the Kingdom is well known for being the second largest oil producer \u2013 after the US \u2013 and the revenues that come with providing the commodity the world runs on, it is also well aware it needs to reduce its reliance on said revenues.<\/p>\n Vision 2030 seeks to encourage industrialisation and resource development to achieve this goal with billions spent on building an infrastructure base.<\/p>\n There are many incentives to develop a project in Saudi Arabia, so writes Martin Place Securities (MPS) executive chairman Barry Dawes in a report published earlier this year on European Lithium\u2019s partnership with Obeikan.<\/p>\n \u201cOil revenues have been building a powerful infrastructure base for Saudi Arabia,\u201d Dawes writes.<\/p>\n Saudi Arabia\u2019s infrastructure is nothing short of world class, with 73,000km of roads, 4,500km of railways, 10 seaports and 28 airports, according to MPS.<\/p>\n The Kingdom is also offering debt funding for projects.<\/p>\n \u201cSaudi Arabia is rewarding discoveries by offering 75% debt funding for capex, low energy costs (ultra-low gas prices into electricity generation) and 2-3% interest rates for new mining development projects,\u201d Dawes writes.<\/p>\n These would be welcome incentives as lithium refining is costly on energy, which can be more than 20% of operating costs, meaning that the rate of just US3.2c per kilowatt hour \u2013 well below the US4.8c\/KWh for normal business \u2013 can significantly improve the company\u2019s bottom line.<\/p>\n \u00a0<\/p>\n \u201cThis is another huge milestone for the Wolfsberg project following on from the recent $US15m commitment made by BMW,\u201d executive chairman Tony Sage said.<\/p>\n \u201cWe now have two very dedicated partners to ensure we fulfil our ambition of becoming the first European producers of both spodumene and hydroxide.<\/p>\n \u201cNow after these key milestones have been achieved the next steps become a lot easier. Over the next two quarters we expect to finalise the updated DFS on the now separated projects and secure the necessary funding to commence construction.<\/p>\n \u201cThe board of the newly formed Arabian New Energy will appoint a leading ECPM to oversee the construction of the hydroxide plant. The funding for the project will be organised from within Saudi Arabia.\u201d<\/p>\n Obeikan Investment Group chief executive officer Abdallah Obeikan added that his company was pleased to have reached this agreement with European Lithium.<\/p>\n \u201cWe are convinced that our partnership will be beneficial for all stakeholders. This partnership will combine solid technical expertise of European Lithium and its affiliates with the industrial knowledge of Obeikan and the strength of Saudi Arabian financial markets,\u201d he said.<\/p>\n \u201cIt is a strategic global collaboration to achieve the goals of Vision 2030 and to advance the development of the new industry in the Kingdom of Saudi Arabia.\u201d<\/p>\n \u00a0<\/p>\n\n \ufeff<\/span>\u00a0<\/p>\n This article was developed in collaboration with European Lithium, a Stockhead advertiser at the time of publishing. <\/em><\/p>\n \u00a0<\/em><\/p>\n This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.<\/em><\/p>\n The post European Lithium partner Obeikan commits to Saudi lithium hydroxide plant<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"Obeikan Group takes key step forward<\/strong><\/h2>\n
Huge milestone<\/strong><\/h2>\n