Albemarle moves closer to lithium jv with Mineral Resources in Australia

Albemarle, the US-based speciality chemicals company, has signed an exclusivity agreement with Mineral Resources Ltd. (MRL) for setting up a proposed 50:50 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, located in the Pilbara region of Western Australia, is a hard rock lithium deposit, with an estimated mine life of over 30 years. The purchase price for Albemarle’s 50% interest in the jv would be $1.15-bn. The proposed jv, which remains subject to negotiation of definitive documents, would combine Albemarle’s lithium production and marketing expertise with MRL’s regional presence and mining capabilities. Under the terms of the agreement, Albemarle would manage the marketing and sales of lithium hydroxide produced by the jv via its long-term agreement strategy.

“This agreement is consistent with our corporate strategy of pursuing M&A opportunities that can accelerate and de-risk our organic growth strategy,” said Mr. Luke Kissam, Albemarle’s CEO. As per the agreement, Albemarle would acquire a 50% interest in all mineral rights within the Wodgina tenements, other than iron ore (which will be retained exclusively by MRL) and TANTALUM (which remain held by a third party), all fixed infrastructure and utility assets, the spodumene concentration plant and the mobile mining equipment.

After construction and ramp-up of the spodumene concentration plant, the jv is expected to produce up to 750-ktpa of 6% spodumene concentrate from Wodgina, which is planned to be used as feedstock for the lithium hydroxide plant, to be jointly set up in stages by the two companies.

The first stage, once fully commissioned, is expected to produce at least 50-ktpa of battery grade lithium hydroxide. Construction would commence as soon as the 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 prevailing lithium market conditions at the time supporting this development), at which point the plant is expected to be producing at least 100-ktpa of lithium hydroxide.