Kali Metals’ entrance on the ASX has generated tremendous interest, notably from heavyweights in the local mining sector. The managing director of Mineral Resources, Chris Ellison, showed significant interest through his private company, Wabelo.
The success story of Kali Metals, a spin-off of Kalamazoo Resources (ASX: KZR) and Karora Resources (TSX: KRR) lithium assets, stands in stark contrast to the challenges faced by other Australian juniors.
For instance, Core Lithium (ASX: CXO) recently had to cease operations at its Finniss complex due to what it described as “tough” market conditions. Moreover, other small players have found themselves embroiled in a fierce battle for control over sources of the coveted battery metal. Notably, Albemarle (NYSE: ALB), the world’s largest lithium producer, made a move to acquire Liontown Resources (ASX: LTR) for $4.3 billion last year, yet the acquisition was blocked by Australia’s richest woman, Gina Rinehart, who acquired a 19.9% stake in the target company.
Rinehart similarly thwarted the takeover of Azure Minerals (ASX: AZS) by Chile’s SQM (NYSE: SQM) by purchasing an 18% blocking stake in the company.
Additionally, several Australian lithium juniors find themselves at a disadvantage compared to their global peers due to high levels of Chinese ownership or processing. This makes them ineligible for US government subsidies following a draft guidance from the Biden Administration in early December, which stipulated that any company with more than 25% ownership by Chinese, North Korean, Iranian, or Russian shareholders would be classified as a “foreign entity of concern.”
It is noteworthy that two Chinese firms, Ganfeng and Tianqi, were among the earliest foreign players to invest in Australia’s lithium sector and still hold substantial stakes in major mines such as Mt Marion and Greenbushes.
Notably, Kali Metals’ board consists of Sloan as MD, Luke Reinehr, Kalamazoo’s chairperson and CEO, as non-executive chairperson, supported by non-executive directors Paul Adams, John Leddy, and Simon Coyle.
The stock closed up 74% at A$0.435 each, leading Kali Metals to a market capitalization of A$33.2 million ($21.5m).
