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Albemarle's Aussie adventure sparks a shockwave Down Under

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2023-06-21

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Even though it is a major investor in the Chilean lithium industry and says it will deal with the country’s new, higher state involvement in the sector, Albemarle, the world’s leading lithium player, continues to invest and show interest in Australia.

The Chilean government has taken aim at Albemarle and SQM, the local giant, for dominating the country’s lithium sector. If the country’s Congress approves, the government will initiate a multi-decade process to enforce greater state involvement and control in the sector.

Albemarle states that it will engage in discussions with the government regarding its plans and will remain involved in Chile. However, this hasn’t prevented the company from making significant investments in Australia and considering increased involvement in the lithium sector within the US.

The US giant has recently acquired the Australian lithium interests of Lithium Power International (LPI) for $30 million. Instead of spinning off the assets and listing them on the ASX, LPI decided to sell its Australian arm, Western Lithium, to Albemarle. LPI cited Albemarle’s cash certainty, compared to what it referred to as 'subdued capital market conditions,' as the reason for abandoning the spin-off and opting for a straight sale.

As part of the deal, Albemarle will take ownership of the Greenbushes and Pilgangoora exploration projects owned by Western Lithium. Both areas are highly valuable in the Western Australia lithium sector. The Greenbushes area is near the world's largest lithium mine of the same name, where Albemarle holds a 49% stake, while Joint Venture partner Tianqi Lithium (IGO and Tianqi of China) holds 51%. The Pilgangoora area is near the mine of the same name operated by Pilbara Minerals, the country’s largest lithium exporter.

“This agreement with Albemarle provides LPI with immediate value for our Western Lithium subsidiary company,” said Lithium Power International CEO, Cristobal Garcia-Huidobro, in a statement. “Despite the significant progress we had made towards an initial public offering of Western Lithium in the past months, this asset realisation will significantly increase the pre-money valuation of our Western Australia asset portfolio.”

Western Lithium is the latest Australian deal for Albemarle, following its announcement just a month ago that it would invest $A1.3 billion to double the output of its Kemerton lithium hydroxide plant in the southwest of WA to 100,000 tonnes per year. Albemarle also restructured its joint venture with Mineral Resources, selling the Perth-based company 50% stakes in two hydroxide refineries in China while taking greater control of Kemerton and other assets in WA.

Albemarle will supply spodumene to Min Res so that the latter can claim its 15% share of the Kemerton output.

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