Battery recycling plant operator Hydromet Corp Ltd will receive a $1.9 million cash injection from a share placement to a Chinese company to fund its expansion.
Under the deal, Hydromet will issue 49.92 million shares - equating to 15 percent of its issued capital to used lead acid battery recycler Jiangsu Chunxing Alloy Co Ltd of Nanking, China.
The placement, which is set to be completed in the next month upon Chinese government approval, paves the way for an agreement for the supply of lead products to Chunxing from Hydromet's Unanderra recycling operation and Newcastle smelter in Australia.
"The board believes that the following benefits of the involvement with Chunxing will place Hydromet in a much stronger position within the ULAB recycling and secondary lead production markets within Australia and the Pacific," Hydromet said in a statement.
"With the volatile metal market, financial market turmoil and uncertainty experienced since 2008 we believe that joining with Chunxing will be invaluable in working through the challenges ahead and will place us in a positive position to take advantage of improved conditions as they emerge."
A representative of the privately owned Chunxing will join Hydromet's board.
Chunxing is the largest lead recycling company in China with four operating plants, and has more than 30 years experience in the secondary lead smelting market.