(Bloomberg) -- South Africa’s Moti Group said a Chinese company with which it planned to develop a $1 billion lithium processing plant in Zimbabwe was halving its stake in the venture, dealing the project a potential blow.
Moti Group’s Pulserate Investments holds a 10,000 hectare (24,710-acre) lithium exploration concession in the northeast of the country, Africa’s biggest producer of the metal according to the US Geological Survey. Earlier this year Moti said it planned to have the Chinese company, which it didn’t identify, increase its stake in Pulserate to 70% and apply for an exemption to Zimbabwe’s ban on lithium ore exports while establishing a battery factory.
The company, “one of the largest Chinese battery manufacturers,” has instead exercised an option to cut its stake to 10% from 20%, Dondo Mogajane, Moti’s chief executive officer, said in a response to queries. Pulserate “is adjusting its plans in line with the changes introduced by the Zimbabwean government regarding lithium mining and processing conditionalities,” he said.
The decision is a setback to Zimbabwe’s plans to develop an industry that will process the metal, which is crucial to the battery storage and electric vehicle industries. Since the ban was announced in December, stockpiles of the material have built up at mines in the country and smuggling of the ore has increased.
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Moti, which runs a platinum extraction business in South Africa, will now need to find another partner or raise the money itself to build a processing facility.
Mogajane is a former director general of South Africa’s National Treasury who has been tasked with restructuring the Moti Group as its founder, Zunaid Moti, steps back from active management.
Moti has been tied to a number of scandals and told Bloomberg this year that his reputation was hindering the company’s progress. He spent five months in a German jail in 2018 and 2019 after being arrested on an Interpol diffusion notice issued by Russia in connection with the alleged theft of a pink diamond. In 2012, he was charged with conspiracy to commit murder before the case was thrown out of court.
He is no longer subject to a notice from Interpol and said he was arrested improperly on bogus charges engineered by a disgruntled businessman.
Mogajane is the chairman of South Africa’s Government Employees Pension Fund, which has 2.3 trillion rand ($128 billion) under management. He’s also a board member at the New Development Bank, a multilateral lender founded by the BRICS group of countries.
--With assistance from Danny Lee.
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