(Yicai) Jan. 22 — Shares of Huati Lighting Technology tanked by the daily limit after the Chinese operator of street lights said it would give up on its plan to buy a lithium mine in Mozambique.
Huati [SHA: 603679] slumped by 10 percent to CNY14.13 (USD2) as of 2.29 p.m.
The provider of urban lighting services has decided to terminate the acquisition plan announced less than a month ago because it could not reach an agreement with the target company, Kyushu Resources, on key terms of mine development, the Sichuan province-based buyer announced recently.
On Dec. 26 last year, Huati said that a unit would pay USD3 million for 85 percent of Kyushu, which was set up in August and owns the exploration right No. 11,682 in Mozambique’s Zambezia province.
Moreover, the downward trend in lithium prices is another reason to walk away, Huati said. Still, last month the firm had said that if no significant changes occur in prices of lithium carbonate, the project is likely to gross USD103.6 million in annual revenue with a profit of USD45.6 million.
Neither party needs to compensate for the setback as the withdrawal was based on mutual agreement after consultation.
Editor: Emmi Laine
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