Albemarle Corp says it is interested in buying all or part of Tianqi Lithium Corp’s controlling stake in the Greenbushes lithium mine in southwest WA.
China-based Tianqi, which owns 51% of Greenbushes, said in April it was exploring selling equity and assets, including Greenbushes, to cut a $US6 billion debt pile.
With a 49% stake, Albemarle has the right of first refusal over any stake sale, putting it in prime position over mooted rivals Rio Tinto and Wesfarmers Ltd which have been seen as potential buyers of Tianqi’s Greenbushes stake.
Albemarle is the world’s largest producer of lithium for electric vehicle batteries and taking full or partial control of Greenbushes would cement its dominance of the global market for lithium which has fallen into the doldrums in the past year as prices have slumped because of rising production, especially from elsewhere in WA.
“We’re interested in it. We’re following it, but we’re also mindful of the current market environment,” Albemarle Chief Executive Kent Masters told investors on a Thursday conference call, adding there would be “more to come” from the company.
But Masters added that the Chinese government will probably have an influence on who buys the stake if it is put on the market.
Albemarle has other interests in WA lithium with Mineral Resources in the Pilbara. It has revised that deal and delayed plans to build a 75,000 tonnes a year Lithium processing plant, also in WA.
Albemarle also revealed in its March quarter earnings report that Tianqi had agreed to repay $US100 million it owes the Greenbushes joint venture, officially known as Talison Lithium.
While Albemarle posted better-than-expected quarterly results on Wednesday, it cut its 2020 budget and dropped its annual forecast as sales drop amid the coronavirus pandemic. That’s a sign the demand for lithium from electric vehicles is easing because of falling sales (especially in China) for those vehicle types.
The company has $US1.7 billion of liquidity and is still paying a dividend.
