On May 10, Huayou Cobalt disclosed the latest developments regarding its subsidiary's transfer of related rights and obligations and the acquisition of equity in Atlantic Lithium Limited. The core content of this rights and obligations transfer includes obtaining the right to acquire a 22.5% stake in Atlantic Lithium's Singapore subsidiary. It also involves securing an offtake right for no less than 50% of the products from the Ewoyaa Lithium Project and assuming related obligations for project development. If both the "Contract Novation Agreement" and the transaction to acquire 100% of Atlantic Lithium are completed, Huayou Cobalt will indirectly hold an 87% interest in the Ewoyaa Lithium Project.

[SMM Analysis] Reassessing the Logic Behind Sulfur's "Surge" Driving Nickel Prices Higher

North American lithium producer Elevra Lithium Limited has announced that it will sell its entire interest in the Ewoyaa Lithium Project in Ghana to Zhejiang Huayou Cobalt Co Ltd. Under the agreement, the transaction is expected to close in the first quarter of fiscal year 2027, with Elevra receiving approximately US$71 million in cash (before fees and taxes). The sale includes all of its rights and interests in the project, as well as associated offtake rights. Meanwhile, Huayou also plans to acquire Atlantic Lithium Limited to gain full control of the project, although the two transactions are independent of each other. The transaction remains subject to regulatory approvals in Ghana.

On May 7, Zhejiang Huayou Cobalt Co., Ltd. issued an announcement stating that it has signed a "Scheme Implementation Deed" and related agreement appendices with Atlantic Lithium Limited, planning to acquire 100% of its equity through a scheme of arrangement. Upon completion of the transaction, Atlantic Lithium will be consolidated into Huayou Cobalt's financial statements, and Huayou Cobalt will obtain 100% of its equity. Atlantic Lithium's main business focuses on lithium exploration and development in the African market, with its core asset being the Ewoyaa Lithium Project in Ghana. Huayou Cobalt stated that this is an important step in deepening its overseas resource layout, which will further enhance its lithium resource self-sufficiency rate and supply chain security resilience.

Nickel prices continued to rise sharply this week, with the market narrative shifting from last week's "fluctuating at highs after policy materialization" to "full fermentation of substantive supply-side shocks." Indonesia's Weda Bay nickel mine announced a May production halt for maintenance due to exhausted RKAB quotas, Huayou Cobalt's subsidiary Huafei Nickel & Cobalt announced partial production line shutdowns from May 1 due to sulfur shortages, and the continued blockade of the Strait of Hormuz in the Middle East deepened the sulfur supply crisis. The three supply-side shocks combined to push nickel price centers sharply higher. The most-traded SHFE nickel contract broke through the 150,000 yuan/mt mark this week, while LME nickel briefly surpassed $19,500/mt intraday. Spot market, SMM #1 refined nickel averaged 150,000 yuan/mt this week, up 5,000 yuan/mt WoW. Spot premiums remained low as futures surged rapidly, with Jinchuan nickel premiums declining to 1,300 yuan/mt. Domestic mainstream electrodeposited nickel maintained significant discounts, further highlighting the structural feature of "strong futures, weak spot" in supply-demand fundamentals. On the macro front, US-Iran negotiations reached a complete impasse this week, with expectations of prolonged geopolitical risks rising. The two sides diverged sharply on the Strait of Hormuz issue: Trump claimed Iran was "on the verge of collapse and requesting the strait be opened," demanding Iran hand over all enriched uranium; Iran emphasized its "absolute control" over the strait and demanded transit fees from passing vessels. Fed Chairman nominee Warsh explicitly refused to commit to interest rate cuts at last week's hearing, and the market continued to digest this stance this week — CME Fed Watch showed a 99% probability of rates remaining unchanged in April and only about 3% probability of a cumulative 25bp cut by June, with monetary easing expectations virtually disappearing. Inventory, Shanghai Bonded Zone inventory was approximately 1,700 mt this week, flat WoW. China's social inventory was approximately 101,000 mt, with an inventory buildup of approximately 3,200 mt WoW. Looking ahead, although persistently high domestic inventory continued to pressure prices, Indonesia's Q2 triple shock of "ore tightening + sulfur supply disruption + MHP production cuts" is accelerating from expectations toward reality. After the Labour Day holiday, the most-traded SHFE nickel contract is expected to trade in the range of 145,000-155,000 yuan/mt.

Huayou Cobalt announced that due to a sharp increase in the price of sulfur, a key auxiliary material for production, and the prolonged high-load operation since commissioning, among other factors, the company decided to temporarily halt production for maintenance on some production lines at Huafei Nickel & Cobalt starting from May 1, 2026. During this maintenance period, approximately 50% of Huafei Nickel & Cobalt's production is expected to be affected.

On April 16, Zhejiang Huayou Cobalt Co., Ltd. released its first quarter report for 2026. During the reporting period, Huayou Cobalt achieved operating revenue of 25.804 billion yuan, a year-on-year increase of 44.62%; total profit of 3.692 billion yuan, a year-on-year increase of 100.49%; net profit attributable to shareholders of the listed company of 2.497 billion yuan, a year-on-year increase of 99.45%; and net profit after deducting non-recurring gains and losses of 2.070 billion yuan, a year-on-year increase of 68.76%. As of the end of the first quarter, Huayou Cobalt's total assets reached 174.669 billion yuan, an increase of 9.55% compared to the end of the previous year.

[Hyundai Motor Group and Huayou Cobalt Jointly Built a Power Battery Recycling System in Indonesia] Recently, Hyundai Motor Group signed a cooperation agreement with Zhejiang Huayou Recycling Technology Co., Ltd. (a subsidiary of Huayou Cobalt) to jointly build an EV power battery recycling system in Indonesia. The cooperation covered the recycling and utilization of battery production scrap and end-of-life batteries, aiming to achieve a closed-loop resource system throughout the entire battery life cycle.

Hyundai Motor Group announced that it has signed a memorandum of understanding (MoU) with Zhejiang Huayou Recycling Technology, a subsidiary of China’s Huayou Cobalt, to jointly build an electric vehicle (EV) battery circular economy in Indonesia. Under the agreement, the two parties plan to collect battery scrap generated during production at HLI Green Power, the joint battery cell plant established by Hyundai Motor Group and LG Energy Solution in Indonesia. The scrap will be pre-treated at Huayou Recycling’s local facilities and crushed into “black mass,” a powder containing various metals, from which key minerals can later be extracted and reused in battery manufacturing.

PT PLN (Persero), shareholder of Indonesia Battery Corporation (IBC), supports IBC’s partnerships to accelerate an integrated national battery industry from upstream mining to downstream production. On Jan 30, 2026, in Jakarta, IBC signed a framework agreement with PT ANTAM and HYD Investment Limited consortium (Zhejiang Huayou Cobalt & EVE Energy). IBC CEO Aditya Farhan Arif called it the first step in national battery downstreaming—emphasizing investment, technology transfer, and domestic capacity building. The $6B project builds a full mine-to-battery chain: nickel mining & processing, precursor/cathode materials, battery cell production (starting 20 GWh), mainly in East Halmahera and West Java. PLN CEO Darmawan Prasodjo stressed its key role in boosting Indonesia’s EV ecosystem.