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Smooth sailing for Kali Metals while others tread water

Image: Adobe / Golden House Images , stocks, invest, money, kali metals, australian, vanadium

While a slew of producers in Australia battle to keep the lights on, ASX newcomer Kali Metals is swatting away corporate investors with a stick.

Kali Metals has had an exciting and successful start to life after first arriving on the ASX earlier this week.

Mineral Resources (MinRes) has emerged overnight with a near 10 per cent stake in the lithium play, distinct from the 4.86 per cent stake that the company’s managing director Chris Ellison snagged during Kali’s initial public offering (IPO).

Gold miners Kalamazoo Resources and Karora Resource, the two companies from which Kali was spun, hold 22.1 per cent and 20.2 per cent interests in Kali respectively.

Also on the shareholder roster are a number of former and current MinRes executives.

Interestingly, MinRes revealed in an interview with The Australian Financial Review that it had approached Kali about being involved in the IPO as well as becoming a joint venture partner. Those offers were declined.

“Kali has been explicit about its decision to exclude companies such as MinRes from the IPO,” a spokesman said.

Looking at Kali’s impressive portfolio of lithium projects inherited from Kalamazoo and Karora, it’s not hard to see what all the fuss is about. The company holds ground in the highly prospective Pilbara and Eastern Yilgarn regions in WA, and other sites across NSW and Victoria.

Two of Kali’s three lithium projects in the Pilbara (DOM’s Hill and Marble Bar) are fully funded by SQM as part of a joint venture with the Chilean chemical giant.

Kali’s success comes at a time strained time in the resources sector, with the prices of lithium and nickel both faltering and inflation putting the pressure on many miners.

Just this week, Core Lithium announced that it would suspend mining and development works at its Finniss operations in the NT until the price of spodumene, which has fallen more than 85 per cent in the last twelve months, recovered.

And nickel is teetering above $US16,000 on the London Metal Exchange – lows not seen since early 2021. This has caused IGO to slash roughly one billion in value off its Western Areas nickel assets, with the company warning of further write downs.

Nickel producer Panoramic Resources also felt the sting, entering into voluntary administration in December last year. The company’s administrators officially halted mining at the Savannah nickel mine in WA just this week.

Most recently, Alcoa announced that it would shutter its Kwinana alumina refinery in WA, citing costs and market conditions as factors.

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