Albemarle is all set to acquire a stake of 50% in the Wodgina lithium mine in the Pilbara region of Western Australia from Mineral Resources (MRL) for $1.15bn, to create a joint venture.
In this regard, the US specialty chemicals company has signed an exclusivity agreement with Mineral Resources to potentially create the 50:50 joint venture (JV) to own and operate the Wodgina lithium mine.
The potential deal gives an enterprise value of $2.3bn to the Australian lithium mining project.
The partners aim to develop an integrated lithium hydroxide operation at the hard rock lithium deposit to produce spodumene concentrate and lithium hydroxide. The Wodgina lithium mine is estimated to have a mine life of more than 30 years.
As per the terms planned for the transaction, Albemarle will take a 50% stake in all mineral rights within the Wodgina tenements. Excluded in the potential deal are the iron ore, which will be exclusively retained by Mineral Resources and tantalum, which will be continued to be owned by Global Advanced Metals Greenbushes.
Albemarle will also not get to ownership in all the fixed infrastructure and utility assets, the spodumene concentration plant and the mobile mining equipment involved with the Wodgina deposit.
The companies expect that post construction and ramp-up, the spodumene concentration plant will have a production up to 750Ktpa of 6% spodumene concentrate from the Wodgina lithium mine. The spodumene concentrate will be used to feed a lithium hydroxide plant to be developed in the future.
Mineral Resources managing director Chris Ellison said: “Our proven local Western Australian capability is extremely well complemented by Albemarle’s proven technical downstream processing expertise and their international marketing capabilities in lithium and other energy storage minerals.”
Albemarle and Mineral Resources are also planning to jointly fund, design, construct and operate the lithium hydroxide plant in stages at the Wodgina lithium mine by using the US specialty chemicals company’s core design.
After its fully commissioning, the first stage of the lithium hydroxide plant is estimated to produce over 50ktpa of battery grade lithium hydroxide. Its construction will begin once the required licenses and approvals are secured.
A second stage of the lithium hydroxide plant is also planned by the parties which will be based on prevailing lithium market conditions in the future.
Albemarle CEO Luke Kissam said: “This Agreement is consistent with our corporate strategy of pursuing M&A opportunities that can accelerate and de-risk our organic growth strategy.
“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.”