BlackRock, one of the most influential mining investors, has cut its stake in London-listed lithium miner Bacanora Minerals, following its struggle to secure financing this year.
The fund manager reduced its stake to below 5 per cent from 9.96 per cent previously, according to a filing published on Thursday.
BlackRock has been one of the biggest investors in lithium miners over the past two years, in a bet that growing sales of electric cars will boost demand for the raw material in their batteries.
But while sales of electric cars have continued to rise, the price of lithium has fallen this year due to fears about an oversupply of the raw material, which is produced mostly in Chile and Australia.
As a result junior lithium miners have struggled to raise financing for their projects. Bacanora’s shares have fallen by 77 per cent year-to-date after it cancelled a planned $100m equity raising at the last minute in July.
While lithium is not traded on any exchange, the price for battery grade lithium carbonate in China has fallen by 55 per cent over the past year, according to Fastmarkets.
Bacanora said last month it had appointed Citigroup as a broker and financial adviser to lead a new round of equity financing along with Canaccord Genuity.
Bacanora said on Thursday that it is was also in “discussions with a number of industry and finance parties” on financing its Sonora open pit mine in northern Mexico.
“We remain confident the outstanding funds will be secured in due course,” Mark Hohnen, chairman of Bacanora said.
Bacanora needs $460m for its Sonora [project but has so far only secured $240m, in a mix of debt and $90m conditional investment by Japanese trading company Hanwa and the Sultanate of Oman.
Mr Hohnen also said the company was looking at listing its Zinnwald lithium project in Germany “on at least one public market” in 2019.
Shares in Bacanora fell by 5.8 per cent on Thursday to trade at 24.25p.
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