(Reuters) – Piedmont Lithium Inc’s shares fell 5% in early trading on Wednesday after short seller Blue Orca Capital alleged that mining licenses in Ghana obtained by a company it invested in were through what appeared to be “textbook corruption”.
In 2021, Piedmont invested $100 million in Atlantic Lithium to secure spodumene – high-purity lithium ore – from Atlantic’s mine in Ghana.
Blue Orca said its investigation indicates that Atlantic obtained key Ghana mining licenses by making secret payments and promises of payment to the immediate family of a high-level Ghana politician.
Piedmont, which has a supply agreement with Tesla Inc, did not immediately respond to a request for comment.
The short seller said it does not believe that authorities in Ghana will ratify Atlantic’s mining licenses “tainted by corruption”, based on precedents in the country and around Africa.
Piedmont earns “zero revenues” but enjoys a $1.1 billion market cap on its promise that its newly announced Tennessee conversion facility will produce battery grade lithium under a supply deal from the Ghana lithium mine, Blue Orca said.
Piedmont in January amended its deal with Tesla to supply spodumene concentrate, a key raw material for making batteries, to the electric-car maker through 2025.
Piedmont’s shares were down 5% at $54.29.
(Reporting by Arunima Kumar in Bengaluru; Editing by Sriraj Kalluvila)
