The Neometals Ltd (ASX: NMT) share price is heading south today after the valuable metals miner made a surprise announcement.
At the time of writing, Neometals shares are down 1.32% to 75 cents apiece. In comparison, the All Ordinaries Index (ASX: XAO) is up 0.35% to 7,815 points.
What did Neometals announce?
In last night's release, Neometals advised that its memorandum of understanding (MOU) with Indian company Manikaran Power has been terminated.
Based in New Delhi, Manikaran Power is the third-largest power trading and diversified renewable energy company in India. The conglomerate sells and purchases electricity through short- and medium-term trades and on the power exchanges.
Previously, Neometals and Manikaran Power commenced a joint feasibility study for a lithium refinery in India. This followed a binding MOU signed in June 2019 providing a framework to assess producing lithium carbonate equivalent in the country.
The project looked at having a capacity to produce up to 20,000 tonnes of lithium hydroxide per year. If established, ore would be processed from Neometals' Mount Marion mine in Western Australia to produce battery-grade material for electric cars.
However, no further details were given in the update as to why the collaboration between both parties fell through. Investors have since decided to offload their holdings, sending the Neometals share price lower.
It's worth noting that India is on course to become the world's fourth-largest electric vehicle market by 2040. The first three biggest markets consist of the United States, China, and the European Union.
About the Neometals share price
Over the past 12 months, the Neometals share price has rocketed by more than 320%. Year to date it has been just as impressive, up more than 170% over the last 9 months.
The company's shares hit an all-time high of 89 cents this month before profit-taking swooped in.
Based on today's price, Neometals has a market capitalisation of roughly $411.2 million, with approximately 548 million shares on issue.
