Battery materials maker Australian Mines gets state loan, shares soar

July 15 (Reuters) - Australian Mines Ltd AUZ.AX said on Wednesday the government of Queensland state has offered the advanced battery materials maker a financial support package for its Sconi cobalt-nickel-scandium project, sending its shares soaring about 60%.

The company said in a statement that the state support package, a part of the Jobs and Regional Growth Fund, specifies that Australian Mines should execute an offtake agreement by Sept. 30 for 100% of the nickel and cobalt sulphate to be produced from the project.

The aim of this fund is to grow regional economies and create long-term jobs for Queenslanders.

The company must also employ at least 191 people in Queensland, on a full-time and ongoing basis, by June 2024 and maintain the number for the duration of the agreement.

"This project has the potential to support the regional economy and hundreds of jobs. That's why the Palaszczuk Government is proud to support the project as part of Queensland's plan for economic recovery," Minister for Regional Development and Manufacturing Glenn Butcher said.

Australia is the world's biggest supplier of lithium and has significant nickel and cobalt reserves, which are key components in electronic vehicles (EV).

However, battery makers in the country have been affected by a prolonged downturn in prices amid slowing sales in China, the world's top EV market, that worsened after a hit to demand as a result of the coronavirus-induced lockdown.

Shares of the company notched their best intraday session since December 2018.

(Reporting by Shruti Sonal in Bengaluru, Editing by Sherry Jacob-Phillips)

((Shruti.Sonal@thomsonreuters.com; Twitter: @shrutisonal26;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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