Piedmont Lithium Inc said on Thursday that the company and Atlantic Lithium Ltd will seek legal advice to address the claims made by short-seller Blue Orca Capital.
Blue Orca alleged in a report on Wednesday that the mining licences obtained by Atlantic in Ghana were through what appeared to be “textbook corruption”.
In 2021, Piedmont invested $100 million in Atlantic to secure spodumene – high-purity lithium ore – from Atlantic’s mine in Ghana. Piedmont has a spodumene supply agreement with electric-vehicle maker Tesla Inc.
Shares of Piedmont fell 1.6% to $58.58 in morning trade.
Piedmont has the right to buy half of Atlantic’s production at market prices on a life-of-mine basis, and to earn a 50% interest in the Ghanaian projects.
Blue Orca said in its report that Atlantic obtained key Ghana mining licenses by making secret payments and promises of payments to the immediate family of a high-level politician in Ghana. Reuters could not immediately verify Blue Orca’s allegation.
The short-seller also said it does not believe that authorities in Ghana will ratify Atlantic’s mining licenses, based on precedents in the country and around Africa.
Atlantic in a statement refuted the allegations made by Blue Orca.
Piedmont is planning to use spodumene concentrate from Atlantic as partial feed for its proposed Tennessee Lithium hydroxide plant.
The company, however, said that if for any reason it does not exercise its right to the offtake supply, Piedmont “is confident that alternative sources of spodumene concentrate would be available to feed the Tennessee facility.”