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Lithium is critical to making lithium-ion batteries, which are increasingly widely used.
Ronny Hartmann/Getty Images
Piedmont Lithium
and Atlantic Lithium denied allegations from a short seller that slammed Atlantic stock on Wednesday.
The investment fund Blue Orca Capital released a report saying
Atlantic Lithium
,
which has agreed to supply spodumene rock, a lithium-bearing ore, to Piedmont (PLL), made “secret payments” to the immediate family of a Ghanaian politician to secure mining rights in the country. Blue Orca, based in Austin, Texas, said its report was based on corporate records and other documents in Ghana and other jurisdictions. Soren Andahl is the chief investment officer.
Blue Orca said that Atlantic Lithium needs to mine ore in Ghana in order to supply raw material to a processing facility Piedmont plans to open in Tennessee. The report indicated that Blue Orca was short Piedmont shares, meaning it was positioned to gain if the stock fell.
The report drove Atlantic stock down 40% in overseas trading Wednesday. Shares closed 15% higher on Thursday.
Piedmont shares rose more than 4% Wednesday, but fell 4.1% by Thursday afternoon. The
S&P 500
and
Dow Jones Industrial Average
were down 1.7% and 1.4%, respectively.
In response to a query about Blue Orca’s allegations, Atlantic referred Barron’s to a statement saying that it holds valid prospecting licenses and operating permits for all of its current activities. It said it “outrightly refutes the allegations of impropriety made by the Report.”
Piedmont noted that Atlantic denied the allegations and said that it has the right to buy 50% of the spodumene concentrate produced by Atlantic’s Ghana lithium project. The company is confident that alternative supplies would be available for the Tennessee facility if it doesn’t exercise its right to buy the concentrate from Atlantic, it said.
The Tennessee plant will make lithium hydroxide for lithium-ion batteries. That plant is slated to start up in 2025 or 2026.
So far this year, Piedmont stock is up about 31%. Atlantic stock is down about 30%.
Piedmont has a market capitalization of about $1.1 billion. Atlantic’s is about $160 million.
