Scorpion Minerals Secures Major Chinese Partnership to Fast-Track WA Lithium Operations
Scorpion Minerals (ASX: SCN) has struck a significant strategic partnership with Chinese battery materials giant GreatPower Nickel and Cobalt Materials, bringing USD$10 million in staged development funding to advance lithium opportunities across Western Australia. The deal positions Scorpion to rapidly scale its lithium portfolio while maintaining operational control and decision-making authority over its projects.
The partnership centres on a comprehensive two-stage funding model designed to take Scorpion's lithium assets from exploration through to production readiness. Stage 1 delivers an immediate USD$2 million injection to establish a JORC-compliant resource estimate of 10 million tonnes at 1.0% Li2O, while Stage 2 provides an additional USD$8 million for feasibility studies and mine development work.
"The fact that we have attracted the interest of such a significant Chinese player speaks volumes to the underlying quality of our lithium assets in WA, and the capabilities of our management team to advance these assets through to production," commented CEO Michael Fotios.
GreatPower Brings Serious Industrial Credentials to the Partnership
GreatPower Nickel and Cobalt Materials represents one of China's most established battery materials manufacturers, with credentials that underscore the strategic value of this alliance. The company employs over 400 people and generates annual revenue exceeding 4 billion RMB (USD$560 million), operating six manufacturing plants across China.
The Chinese giant's client roster includes industry heavyweights LG Energy Solutions, CATL, BMW, and Samsung. Notably, LG Energy Solutions holds a 4.02% shareholding in GreatPower, demonstrating the company's integration within global battery supply chains.
| GreatPower Production Capacity | Annual Output |
|---|---|
| Cobalt Products | 15,000 tonnes |
| Nickel Products | 56,000 tonnes |
| Lithium Carbonate | 5,000 tonnes |
| Recycled Battery Materials | 15,000 tonnes |
The partnership extends beyond traditional funding arrangements, with GreatPower expressing interest in developing solar power infrastructure to support future lithium mining operations. This integrated approach aligns with GreatPower's stated environmental, social and governance objectives and digital energy integration strategy.
Furthermore, Scorpion Minerals new Chinese partnership provides the company with immediate access to established Asian markets through GreatPower's existing manufacturing capabilities and customer relationships.
Understanding Lithium Resource Classifications: Why JORC Compliance Matters
The partnership hinges on Scorpion delivering a JORC-compliant resource estimate, a critical milestone in Australian mining development. JORC (Joint Ore Reserves Committee) represents the Australian standard for reporting mineral resources and ore reserves, providing investors with confidence in resource estimates through rigorous geological and statistical validation.
A JORC-compliant resource of 10 million tonnes at 1.0% Li2O represents a substantial lithium endowment. For context, lithium oxide (Li2O) content of 1.0% is considered commercially viable for many lithium projects, particularly in Western Australia's established mining infrastructure environment.
This classification system provides several key benefits for mining companies and investors through three distinct resource classification levels:
- Measured Resources: Highest confidence level based on detailed exploration
- Indicated Resources: Moderate confidence with sufficient sampling
- Inferred Resources: Lower confidence requiring additional data
This classification matters significantly to investors because JORC compliance enables bank financing for project development, accurate feasibility study modelling, transparent resource reporting to shareholders, and international recognition by mining finance institutions. Additionally, the 10 million tonne target resource would position Scorpion among Australia's significant lithium resource holders, providing substantial foundation for long-term production planning.
Achieving this milestone would trigger the second stage of funding under the partnership agreement, demonstrating the strategic importance of meeting JORC standards.
Strategic Partnership Structure Preserves Scorpion's Operational Control
The MOU establishes a carefully structured relationship that maintains Scorpion's decision-making authority while securing essential development capital. Key terms demonstrate sophisticated deal architecture designed to align both parties' interests across multiple development phases.
Stage 1 Benefits
Stage 1 provides USD$2 million upfront funding alongside 25% offtake rights to GreatPower. Importantly, this funding converts to equity at a 15% discount to the 30-day VWAP only upon mining approval, preserving Scorpion's operational independence during critical exploration phases.
Stage 2 Expansion
Upon JORC resource completion, Stage 2 delivers an additional USD$8 million with 25% additional offtake rights, bringing GreatPower's total offtake to 50%. The same equity conversion terms apply, maintaining Scorpion's control throughout feasibility studies.
Production Phase
During the production phase, GreatPower organises mine development funding whilst securing 40% additional offtake rights, totalling 90% of production. However, Scorpion retains full mining decision authority throughout all phases.
"This MOU marks the cornerstone of the company's strategic move toward collaboration and development of upstream lithium resources, aiming at achieving sustainable energy and ESG goals," stated GreatPower Chairman DongQiang (Aaron) Cao.
The offtake arrangement provides price certainty and market access, reducing traditional commodity marketing risks associated with mining operations. Nevertheless, Scorpion retains authority over mining decisions and operational planning, ensuring strategic flexibility.
Immediate Catalysts and Development Timeline
Scorpion Minerals new Chinese partnership creates multiple near-term catalysts for shareholders, with GreatPower's Chairman scheduled to visit Western Australia in early December 2025. This visit likely signals acceleration of due diligence processes and formal agreement negotiations.
The structured timeline includes several key upcoming milestones:
- December 2025: GreatPower Chairman WA visit
- Q1 2026: Formal binding agreement execution (estimated)
- 2026: Stage 1 resource definition work commencing
- 2027: Target JORC resource completion and Stage 2 funding release
The 12-month MOU term provides structured timeline for converting strategic intent into binding commercial arrangements. Scorpion's ability to advance lithium activities parallel to its existing gold exploration at Pharos and Kirkalocka projects demonstrates operational scalability without resource constraints.
Consequently, the partnership's staged approach reduces execution risk while providing Scorpion flexibility to pursue additional lithium opportunities already identified by management. The company can now allocate resources across multiple projects without traditional funding limitations.
Investment Thesis: Lithium Demand Growth Meets Established Supply Chain Integration
Scorpion Minerals new Chinese partnership arrives during a period of structural lithium demand growth driven by electric vehicle adoption and energy storage expansion. The alliance provides Scorpion with direct access to established Asian battery supply chains through GreatPower's existing relationships with LG Energy Solutions, CATL, and major automotive manufacturers.
| Factor | Advantage |
|---|---|
| Geographic Location | Western Australia's proven lithium infrastructure |
| Funding Security | USD$10M staged development capital secured |
| Market Access | Direct connection to Asian battery manufacturers |
| Operational Control | Scorpion retains mining decision authority |
| Integrated Development | Solar power infrastructure potential |
Western Australia hosts approximately 50% of global lithium production capacity, providing Scorpion with access to established mining services, infrastructure, and regulatory frameworks. The state's proximity to Asian markets reduces logistics costs compared to South American lithium operations.
GreatPower's USD$560 million annual revenue and established client relationships provide Scorpion with immediate market credibility and potential customer base expansion beyond the 90% offtake arrangement. For instance, the partnership could facilitate introductions to other battery manufacturers seeking reliable lithium supply sources.
The timing of this partnership aligns with lithium market fundamentals, as electric vehicle production continues expanding globally. Battery manufacturers increasingly seek secure upstream supply arrangements to manage price volatility and supply chain risks.
Why Should Investors Track Scorpion Minerals?
Scorpion Minerals has positioned itself at the intersection of Australian lithium resource potential and Asian battery supply chain integration. Scorpion Minerals new Chinese partnership validates management's asset acquisition strategy and provides substantial development capital without dilutive equity raising requirements.
Key investment tracking points include immediate funding security that removes traditional exploration financing risks, alongside established partner credibility through GreatPower's major client relationships. The partnership structure provides operational flexibility to pursue additional lithium opportunities whilst maintaining strategic timing that aligns with lithium demand growth cycles.
Furthermore, Scorpion benefits from geographic advantages in Western Australia's proven mining environment. The partnership's structure preserves Scorpion's upside participation while securing essential development resources.
With GreatPower handling mine development funding and providing 90% offtake certainty, Scorpion has effectively de-risked the traditional mining development pathway. The agreement provides Scorpion with optionality to pursue additional lithium assets while maintaining focus on existing gold projects.
The December 2025 visit by GreatPower's Chairman represents the next immediate catalyst, with formal agreement execution likely following in early 2026. For investors seeking exposure to lithium development with reduced traditional financing risks, Scorpion's partnership structure offers compelling risk-adjusted return potential.
The combination of established partner credentials, secured funding arrangements, and maintained operational control positions Scorpion favourably within the competitive lithium development landscape. As electric vehicle adoption continues accelerating globally, partnerships providing secure supply chain integration may command premium valuations compared to traditional exploration companies.
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