Australian lithium producer Pilbara Minerals said it had entered into a binding agreement to take over ASX-listed Latin Resources in a deal which valued the mining company at US$370m.

Australia based Latin Resources has mining assets in its homeland and South America. Its shareholders have unanimously accepted the all share deal which valued their shares at US$0.20, a 57% premium on the 10 day volume weighted average price (VWAP).

The deal came amid a prolonged slump in global lithium prices reflecting the recent sharp slowdown in global EV sales growth.

Pilbara is mainly focused on acquiring Latin Resources’ Salinas hard rock lithium project, the company’s key asset located in Minas Gerais in Brazil’s so called Lithium Valley next to Sigma Lithium’s operations. The acquisition would be Pilbara’s first foray into the South American mining sector and was aimed at improving the company’s access to North American battery producers.

The Salinas project was expected to increase Pilbara’s existing lithium resources by between 20% and 30%, adding high quality low cost production assets.

Pilbara said: “The Salinas Lithium Project has the potential to become a top 10 hard rock lithium operation by production globally (excluding Africa) with development flexibility (subject to market conditions) to supply new markets.”

Pilbara CEO Dale Henderson said in a statement: “The acquisition diversifies the business with what we believe is a counter cyclical, accretive extension that further builds out Pilbara Minerals’ position as one of the leading lithium materials suppliers globally. The acquisition will deliver our second wholly owned, Tier 1 hard rock lithium asset which is expected to be lowcost and accretive for our shareholders.”

Latin Resources’ managing director Chris Gale said the deal “provides our shareholders with the exciting opportunity to become shareholders in the world’s largest pure play hard rock lithium producer”.