【SMM Analysis】Ghana Moves to Revise Ewoyaa Lithium Deal as Price Plunge Threatens Viability

Initial assays from the HCK joint venture project, announced on July 10, revealed a 6.9-meter lithium-rich intercept at 174.6 meters depth (drill hole MWOG0002), averaging 2.11% Li₂O with a high-grade 3.45-meter zone grading 3.20% Li₂O.

The turmoil highlights Bolivia's long-standing struggle to balance resource exploitation with political and social stability. Despite possessing the world's largest lithium deposits, internal divisions have repeatedly stalled development. The current standoff could further delay projects involving Chinese and Russian firms, potentially disrupting global lithium supply chains.

[SMM Analysis]Ryosei Akazawa, Japan's chief trade negotiator, emphasized that Japan could not accept the US's imposition of a 25% tariff on imported cars. He pointed out that Japanese automakers produced approximately 3.3 million units in the US annually, significantly exceeding the 1.37 million cars they exported to the US. In addition, these Japanese automakers have invested over $60 billion in the US and created 2.3 million local jobs.

The dispute centers on two key demands from Atlantic Lithium’s Ghanaian subsidiary, Barari DV: slashing royalty rates from 10% to 5% and revising corporate tax terms. The company argues that plunging lithium prices have slashed its post-tax return rate from an initial projection of 94% to just 13.6%. However, NRGI’s independent analysis suggests the project could still yield a 28% return even at current prices.

The SMM Lithium Battery Raw Materials Conference 2025 will be held in Xiamen on October 20-21, 2025, focusing on the critical challenges and opportunities in the supply chain of key battery raw materials such as nickel, cobalt, and lithium amid the global energy transition. The conference aims to analyze international policy shifts, supply-demand dynamics, and pricing mechanisms from multiple perspectives, fostering a more stable, transparent, and efficient industry chain. Key Topics Include: 1.Global Market Trends: Examining the impact of geopolitics, trade policies, and supply-demand imbalances on nickel, cobalt, and lithium pricing and supply chains. 2.SMM Pricing System: Interpreting the authoritative price formation mechanism and providing future trend forecasts. 3.Industry Chain Collaboration: Facilitating long-term contract negotiations and one-on-one business matchmaking to enhance upstream-downstream cooperation. 4.Technological Innovation: Exploring cutting-edge advancements in battery materials to support corporate strategic planning. Highlights: 1.Full Industry Chain Participation: Gathering global stakeholders, including resource extraction, refining, R&D, and end-use manufacturers. 2.Authoritative Market Insights: SMM will release in-depth analysis and price benchmarks for nickel, cobalt, and lithium. 3.Efficient Networking: Structured business matchmaking to promote long-term supply chain partnerships. 4.This conference will deliver forward-looking insights, empowering enterprises to navigate resource flows and market transformations while advancing the sustainable development of the global new energy industry chain.

Recent drilling results have revealed that both the Pinheiro and Reservatório ore bodies exceed expectations in terms of lithium grade and resource volume. The company has completed over 80% of its drilling program, with preliminary assay data indicating high-grade spodumene mineralization at depth, which could significantly enhance the project's overall resource base. Industry analysts suggest this discovery may increase total resources by 15-20%, while the high-grade zones could reduce initial ore processing costs and improve cash flow.

Global mining giant Rio Tinto has signed an agreement with Chile’s state-owned Codelco to jointly develop a major lithium project in the Salar de Maricunga, marking a strategic expansion in battery metals. Under the deal, Rio Tinto will acquire a 49.99% stake in the project company by investing $900 million, collaborating with Codelco to advance the development of this high-grade lithium brine resource.

[SMM Analysis]Summarizing the three articles in this series, the author believes that around 70% of U.S. tariffs on China may be a theoretical equilibrium level. If the tariffs are below around 70%, China's LFP energy storage cells still have a price advantage over those produced by the U.S. on its own production lines. If the tariffs are above around 70%, it would be more advantageous for the U.S. to produce LFP energy storage cells locally. However, assuming that the transshipment trade channel is not completely blocked, transshipment trade remains the most economical way of trade.

[SMM Analysis]On May 27, 2025, REPT Battero Energy Co., Ltd. (hereinafter referred to as "REPT Battero") and Hyosung Heavy Industries (hereinafter referred to as "Hyosung") officially signed a Memorandum of Understanding (MoU) for strategic cooperation, marking the beginning of in-depth collaboration in the energy storage system (ESS) sector. This cooperation focuses on key areas such as ESS battery cell supply, system integration, and market promotion.

This key European lithium resource project is expected to commence production in 2026, with an annual output of 15,000 metric tons of battery-grade lithium products and a minimum operational lifespan of 16 years. In August last year, Sibanye secured €500 million in debt financing, partially backed by the European Investment Bank, to support the project.