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BYD to buy into Tibet lithium producer

(Agencies)
Updated: 2010-09-17 14:23

BYD Co will buy 18 percent of the Tibet Xigaze Zhabuye Lithium High-Tech Co for 201.2 million yuan ($30 million), the Oriental Morning Post reported Friday.

The Shenzhen-based battery and auto maker will buy the stake from Tibet Mineral Development Co Ltd and its major shareholder.

Tibet Mineral also will sell an additional 4 percent of Zhabuye to Tibet Jinhao Investment Co Ltd. It still would hold 50.72 percent of Zhabuye after the equity transfer.

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Tibet Mineral said in a statement Thursday that the transaction is to introduce a strategic investor for Zhabuye, its subsidiary, which lost 13.3 million yuan in the first half of this year.

Zhabuye is a mining company that produces lithium, boron, potassium, and gold, according to the Oriental Morning Post. It also owns 20-year exclusive mining rights over the biggest lithium mine in China, which ranks third in the world, according to Friday's Shanghai Securities News.

BYD, 10 percent owned by billionaire investor Warren Buffett, is a leading developer of cars that use lithium batteries. The purchase in the lithium miner will enhance its strength in battery businesses.

The world's exploitable lithium reserves totals only 4 million tons, the Oriental Morning Post said, citing an earlier report from Hamburg Institute of International Economics.

BYD closed at HK$48.10 Thursday. Tibet Mineral resumes trading Friday after the suspension on Sept 10.