WA court grants delay of Global Lithium’s AGM over questions of Chinese influence
A shareholder vote on board positions at Global Lithium has been delayed by more than two months as the FIRB investigates alleged attempts by Chinese-linked entities to gain control.
The Supreme Court of Western Australia has delayed a shareholder vote on board positions at Global Lithium as the Foreign Investment Review Board investigates allegations of covert attempts by Chinese-linked entities to gain control of the Mineral Resources-backed company.
Embattled Chris Ellison-led MinRes and Gina Rinehart’s Hancock Prospecting, who between them speak for almost 15 per cent of the stock, supported delaying the Global Lithium annual general meeting that had been scheduled for Wednesday in Perth.
Global Lithium pushed for a delay after alerting Treasury to “potential breaches” of the Foreign Acquisitions and Takeovers Act.
The Perth-based company raised its concerns as Perth property developer Liaoliang “Leon” Zhu campaigned for a seat on the board.
Mr Zhu, whose Sincerity Development owns almost 7 per cent of the stock, maintains it would be “completely and utterly false” to suggest his campaign for board change has anything to do with Chinese interests seeking control of Global Lithium.
Mr Zhu is seeking a seat on the board alongside former Norton Gold Fields chief executive Dianmin Chen, and executive chairman Ron Mitchell.
Global Lithium wanted the general meeting pushed back to March 20 to allow time for FIRB to investigate its allegations. Justice Jennifer Hill ruled the meeting should be delayed until February 14.
Global Lithium has told the market its Manna project in WA is one of the largest of its kind and that it is “important to Australia’s desire to protect ownership and control of critical mineral projects of this type.”
It said the board changes being pursued by Mr Zhu could see it lose control of Manna.
Global Lithium’s allegations suggest Mr Zhu’s Sincerity is acting as a stalking horse for other Chinese interests, a claim he denies.
Global Lithium’s strategy has been to avoid signing offtake agreements unless the other party commits to providing capital. Its only offtake agreement covers 30 per cent of any spodumene concentrate production and is with China’s Canmax Technologies.
Canmax owns nearly 10 per cent of Global Lithium and has a controlling stake in lithium hydroxide maker Yibin Tianyi Lithium. Global Lithium’s other backers include Chinese mining services magnate Yongfang Guo and Mr Chen.
The Manna project is in the same region as the Mt Marion lithium mine owned by MinRes and China’s Ganfeng Lithium, and the Bald Hill mine owned by MinRes.
MinRes purchased Bald Hill via a deal with Singapore-listed Alita Resources and its administrator after the intervention of Treasurer Jim Chalmers.
Potential buyers began circling Bald Hill after Mr Chalmers blocked a sale to Nevada-based Austroid Corporation in July 2023 over apparent links to Chinese lithium battery maker Sichuan.
The Australian Taxation Office also investigated an offtake agreement involving Bald Hill and Hong-Kong registered Yihe Cleantech Material.
In an update to shareholders last week, Global Lithium said the confidential information it provided to Treasury that led to a FIRB’s involvement was “serious and complex”.
“Company investigations into the matters continue and Global Lithium expects to provide further information to Treasury as it comes to hand,” the company said.
Lithium’s global share price fell more than 5 per cent on Tuesday to 18c. It was trading at $1.33 last November before the rout in lithium started to take hold.
MinRes and Hancock Prospecting have both had heavy losses on paper after investing in a number of WA lithium stocks amid a pending spree that preceded the crash in prices for the battery material.
MinRes moved to Bald Hill into care and maintenance last week with about 300 workers set to lose their jobs.