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Albemarle to set up 50-50 lithium JV with Mineral Resources in Western Australia

November 22, 2018
Chemical Value Chain

Albemarle has signed an agreement with Mineral Resources Ltd. (MRL; Melbourne, Australia) to create an equally owned joint venture (JV) to own and operate the Wodgina hard-rock lithium mine and ultimately develop an integrated lithium hydroxide operation at the resource site. Wodgina, in the Pilbara Region of Western Australia, is a hard-rock lithium deposit with an estimated mine life of more than 30 years. The purchase price for Albemarle’s 50% interest in the JV would be $1.15 billion, which Albemarle expects to fund with available cash and new credit facilities.

Albemarle will manage the marketing and sales of lithium hydroxide produced by the JV. Under the deal, Albemarle would acquire a 50% interest in all mineral rights within the Wodgina tenements, other than iron ore, which would be retained exclusively by MRL, and tantalum, which remain held by a third party, as well as all fixed infrastructure and utility assets, the spodumene concentration plant, and the mobile mining equipment. The parties would jointly manage the JV. After construction and ramp-up of the spodumene concentration plant, the JV is expected to produce up to 750,000 metric tons/year of 6% spodumene concentrate from Wodgina, which is planned to be used as feedstock in the future lithium hydroxide plant.

The partners plan jointly to operate a lithium hydroxide plant in stages at Wodgina utilizing Albemarle’s design. The first stage, once fully commissioned, is expected to produce at least 50,000 metric tons/year of battery-grade lithium hydroxide. Construction would commence as soon as necessary licenses and approvals are in place.

The second stage is expected to convert the remaining volume of spodumene concentrate to battery-grade lithium hydroxide, subject to lithium market conditions, at which point the plant is expected to be producing at least 100,000 metric tons/year of lithium hydroxide. An exclusivity period for the deal runs until 14 December 2018, unless extended, for the partners to agree to and execute binding definitive documents.

“This agreement is consistent with our corporate strategy of pursuing M&A opportunities that can accelerate and de-risk our organic growth strategy,” says Luke Kissam, Albemarle CEO. “We feel confident in leveraging this world-class lithium resource with an experienced and knowledgeable mining company like MRL to help meet the growing demands of our global customers.”

Albemarle recently shelved a lithium expansion project in Chile.

By Natasha Alperowicz

Source: Chemical Week

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