BCP buying more of LAC

BCP buying more of LAC

Bangchak is beefing up its focus on renewable power and lithium by acquiring more shares of a Canadian lithium miner.
Bangchak is beefing up its focus on renewable power and lithium by acquiring more shares of a Canadian lithium miner.

SET-listed and mostly state-owned Bangchak Petroleum Plc (BCP) is investing C$42.5 million to buy another 50 million shares in a Canadian lithium miner, Lithium Americas Corporation (LAC).

The move is part of the company's plan to focus on renewable power and lithium, which is used in batteries.

President and chief executive Chaiwat Kovavisarach said the deal was done via its subsidiary, BCP Innovation Pte Ltd (BCPI), which is buying an additional 50 million shares in LAC at C$0.85 per share.

"The investment is in line with the company's strategy to expand its natural resources business, which could be integrated with its innovative energy business to increase corporate value and diversify risk," said Mr Chaiwat.

He said the share purchase is expected to be completed by mid-April 2017.

Bangchak's stake in LAC will rise to 70.2 million shares, or 16.4%, from 6.7% previously. BCP previously made a prediction it would hold 20% of LAC.

LAC runs lithium mines in the Las Vegas area of the US with total ore reserves of 2 million tonnes, which can serve industry production for 20-30 years.

After the share purchase, BCPI will loan LAC an amount not exceeding US$80 million to fund Minera Exar S.A., in which LAC holds a 50% equity interest.

Minera Exar holds mining concessions to explore and develop lithium mining projects in Argentina, based on the percentage of LAC's investment in Minera Exar. The loan is to be used for the construction and operations of Minera Exar's Cauchari Olaroz project.

In consideration of such lending, BCPI shall be entitled to off-take lithium and the by-product potash from Minera Exar under an off-take agreement at an agreed upon quantity for a term of 20 years from the start of commercial production at Cauchari Olaroz.

Bangchak, an oil refiner and retailer, diversified its business into lithium because it has a renewable power arm and lithium is used in batteries.

In the first nine months of 2016 it posted a net profit of 3.6 billion baht, up from 4.3 billion in the same period of 2015.

BCP shares closed yesterday on the SET at 35.25 baht, up one baht, in trade worth 371.3 million baht.

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