[ferro-alloys.com]Australian lithium producer Alliance Mineral Assets (ASX: A40) said Monday it had inked a joint venture deal with a major Chinese maker of engines for electric vehicles (EVs), which would allow the miner to feed its output into the partner's manufacturing process without capital costs or construction risks.

As part of the deal, Alliance and Jiangxi Special Electric Motor have agreed to move into the downstream lithium products market within the next six to 12 months.

The West Australia-based miner will export spodumene from its Bald Hill operation to Jiangte, which will then process the material at the plant in China’s Jiangxi Province into lithium hydroxide, a more refined, higher value and higher margin product.

The partners will then sell the lithium hydroxide to third parties, with Alliance and Jiangte to equally share in the sales after recovering each party’s respective mining and conversion costs.

“The hydroxide joint venture provides for a rapid, low risk entry into downstream production and sales of battery-grade lithium products,” Alliance managing director Mark Calderwood said in the statement.

Alliance, previously known as Tawana Resources, will retain ownership of the Bald Hills mine, which began commercial production of spodumene in mid-2018. Output is expected to ramp up to 20,000 tonnes of lithium concentrate per month by 2020.

Shares in the lithium producer went ballistic after the news, climbing up more than 6% to A$0.18. Year-to-date, however, the stock is down about 26%, amid an ongoing sell-off of lithium stocks. Last week alone, the Global X Lithium ETF dropped by 4.3%.

(Mining.com)

• [Editor:王可]