AMG Critical Materials: AMG Moves to Secure a Strategic European Lithium Asset

Research evidence excerpt

AMG Critical Materials: AMG Moves to Secure a Strategic European Lithium Asset

ast horizon (AMG likely sees first production ~2030+), so we do

not expect notable earnings contribution this decade. However, the acquisition

increases AMG’s in-house lithium resource base considerably and enhances its

narrative as an integrated European lithium supplier. Importantly, AMG’s approach

is to downsize the project’s initial scope: management plans to revise the current

PFS to prioritize a smaller first phase (likely below the 18kt p.a., as per the PFS’s

full-scale design) that can be gradually scaled. This should significantly reduce

upfront capex and execution risk, aligning the project with AMG’s disciplined

capital allocation criteria and expertise in lean, modular deployments. It also could

facilitate securing co-financing and grants – e.g., via German/EU funding to develop

strategic raw material assets, as the PFS’s enormous scale likely qualifies for

substantial support.

Strategic significance and long-term optionality

We view the Zinnwald deal as more strategic than financial at this stage, with an

outcome akin to acquiring a long-dated call option on European lithium supply. The

project addresses a growing policy imperative: providing local lithium for European

battery production and EV supply chains. For AMG, it deepens relationships with

both customers (future offtake linkages to battery makers) and policymakers,

potentially unlocking new partnerships (e.g., with other industry players) or funding

avenues as the project matures. On the technical side, zinnwaldite extraction is

known to be more complex than typical spodumene – involving roasting and

chemical leaching – but AMG’s world-class metallurgical team is uniquely well-

suited to tackle this challenge.