From todays AFRAtlantic Lithium and Piedmont Lithium hit by US...

From todays AFR

Atlantic Lithium and Piedmont Lithium hit by US short attack
Tom Richardson Markets reporter and commentatorMar 9, 2023 – 12.55pm
Shares in ASX lithium darlings Piedmont Lithium and Atlantic Lithium were locked in a trading halt on Thursday after a US-based short seller alleged Atlantic Lithium acquired a mining license in Ghana by “textbook corruption”.
London Stock Exchange-listed shares of Atlantic Lithium plunged 32.2 per cent overnight on Thursday as investors reacted to short activist Blue Orca’s claims that Ghana’s parliament may not approve Atlantic’s lithium mining licenses because of corruption.
“In our opinion, evidence of Atlantic’s payments to the son of a high-level politician for mining licenses is textbook evidence of corruption,” Blue Orca said. “We are short Piedmont because without Atlantic’s Ghana supply, Piedmont and any promise of near-term revenue from its much-hyped Tennessee facility are dead on arrival.”
Shares in dual listed Nasdaq and ASX-listed Piedmont Lithium dropped 6 per cent on the Nasdaq overnight, before recovering ground to close 4.2 per cent higher on a market cap of $US1.1 billion ($1.7 billion).
Blue Orca said Piedmont committed in July 2021 to invest $US15.9 million for a 9.9 per cent equity stake in Atlantic and up to $US87 million in the Ghana project in exchange for lithium spodumene offtake rights at market value for the life of the mine.
Government funding
ASX-listed shares in Piedmont Lithium are up nearly 10-fold from 9¢ in August 2020 to last close at 88¢ as lithium spodumene prices in China rose around 10-fold from around $US7000 a tonne the start of 2020 to a peak more than $US70,000 a tonne last year.
In October 2022, Piedmont said it had been selected for a $US141.7 million grant by the US Department of Energy (DOE) to help fund construction of its approximately $US600 million Tennessee Lithium project, which aims to expand the US supply of lithium hydroxide by 30,000 metric tons per year. At the time it said it anticipated first spodumene production from its Ghana project in 2024.
However, Blue Orca said its own research including freedom of information requests to the US DOE suggest the grant now may be in doubt given it was partly dependent on the success of the Ghana supply agreement.
On January 4, Piedmont announced an amended offtake deal to supply spodumene concentrate to Tesla from the second half of 2023 through to 2025.Blue Orca labelled Piedmont’s claims that revenues and profits will flow from its Tennessee lithium hydroxide production facility in 2025 as “fantasy”.
The short seller said this is largely because Piedmont will be unable to secure the spodumene concentrate supply from Atlantic Lithium’s Ghana project.
“Atlantic still needs Ghana’s Parliament to approve and ratify its mining licenses and permits in order to build the lithium mine. But Authorities in Ghana, and acrossAfrica, have a history of revoking mining rights obtained via corrupt payments to high level politicians and officials,” Blue Orca said.
“This is especially true when, like here, General Mosquito is a high-profile member of the opposition political party who has since lost power.”
Neither Atlantic Lithium nor Piedmont Lithium have immediately responded to a request for comment.