Albemarle，the world’s largest producer of battery raw material lithium, has agreed to buy a 50 per cent stake in an Australian lithium mine for $1.15bn, as it looks to grow its supply to meet rising demand from electric cars.
The company will set up a joint-venture with Australia’s Mineral Resources to develop its Wodgina hard rock lithium mine and build a plant to produce lithium hydroxide for batteries.
The deal comes as North Carolina-based Albemarle is facing greater government scrutiny over its business in Chile, where it is looking to expand production from the Atacama Desert.
Demand for lithium is set to triple over the next decade due to rising sales of electric cars, which use the lightweight metal in their batteries.
“We feel confident in leveraging this world-class lithium resource with an experienced and knowledgeable mining company like Mineral Resources to help meet the growing demands of our global customers,” Luke Kissam, Albemarle’s chief executive, said.
Located in the Pilbara region of Western Australia, Albemarle said the Wodgina hard rock deposit has a mine life of over 30 years.
The two companies will fund and build a plant at the mine site to produce lithium hydroxide for batteries, the company said. Albemarle will have the right to market and sell all of the lithium.
The first stage of the project will produce around 50,000 tonnes per year of lithium hydroxide for batteries, rising to 100,000 tonnes in the second phase.
Albemarle is the largest producer of lithium in Chile, where the metal is extracted from brine beneath the Atacama. But regulators have said Albemarle has not honoured its commitment to provide cheaper lithium to companies in Chile, as part of a policy to promote a battery industry in the country.
In October Chile’s nuclear regulator, which is in charge of quotas for lithium production in the country, denied Albemarle’s request to increase production in the country.
Shares in Albemarle have fallen by 25 per cent this year to trade at $95.74 in New York.
Source: FT.com
