State-owned mining development company Finnish Minerals Group has raised its stake in the Keliber lithium project in Finland to 20% from 14%.

The deal was carried out as part of a €104m ($114.82m) rights issue.

Finnish Minerals increased its holding by subscribing to €53.9m worth of shares.

In October 2022, South Africa-based Sibanye-Stillwater assumed control of the Finnish battery chemicals company and project owner Keliber Oy by increasing its holding to exceed 85%.

Sibanye-Stillwater will continue to have a 79% holding in the Keliber project while minority shareholders will own the remaining stake.

The project will produce lithium hydroxide, a key component needed in electric vehicle batteries, from its own ore reserves.

Entailing a €588m investment, the project will involve the development of a lithium hydroxide refinery, the Päiväneva concentrator and two initial open pit mines, namely Syväjärvi and Rapasaari.

Plans are under way to develop the Emmes, Outovesi and Länttä mines towards the end of the 16-year project life.

The refinery is anticipated to produce 15,000 tonnes per annum of battery-grade lithium hydroxide, beginning next year.

The combination of Sibanye-Stillwater’s stake increase to more than 50% and the rights offering met the project’s initial equity financing requirements.

Debt facilities will provide the balance funding needed for the project.

In November 2022, construction work began on the refinery at the Kokkola industrial park after approval of investment.

Earthworks laying work for the refinery commenced last month, with laying of the foundation stone scheduled for 11 May 2023. 

Earlier this year, Sibanye-Stillwater announced that it secured the environmental permit for the project from the Regional State Administrative Agency for Western and Inland Finland.    

Sibanye-Stillwater European region head Mika Seitovirta stated: “The progress made on the project since it was approved last year is very encouraging, while the support shown by the Finnish Minerals Group for the project through this additional subscription is a substantial vote of confidence in the project.”