WA Lithium mine snapped up in race to feed battery giga-factories
WA miner IGO and Chinese-listed Tianqi have launched a $136 million bid for listed explorer Essential Metals as they seek supply for their expanding battery chemical export plant amid increasing demand for lithium products.
Tianqi Lithium Energy Australia, a joint venture between Tianqi and ASX-listed IGO, on Monday announced a 50 cents a share cash bid for Essential Metals – a 36 per cent premium to its average price over the past month.
The deal is another sign of the growth in Australia’s already strong lithium industry.
According to the federal government’s December resources and energy quarterly, by 2024 Australia could have 10 per cent of global lithium refinery capacity, with that share doubling to 20 per cent by 2027. Lithium exports – including lithium ore called spodumene and refined products – are expected to earn Australia $16 billion this financial year.
Australia’s lithium products export sector is benefiting from the growth in electric vehicle sales as the International Energy Agency predicts demand for battery materials will more than triple this decade if the world gets on course for net-zero emissions by 2050. It is also being boosted by a move by buyers of the products to diversify away from China that dominates lithium processing.
Essential’s principal asset is the Pioneer Dome lithium project 130 kilometres south of Kalgoorlie in the same area as Mineral Resources’s Mount Marion lithium mine. The Perth-based junior explorer also has early-stage exploration under way for nickel, gold and additional lithium.
IGO acting chief executive Matt Dusci said the acquisition would allow the joint venture to accelerate lithium exploration to bring new resources into production.
The Tianqi joint venture was formed in mid-2021 when IGO paid $1.8 billion to buy into Tianqi’s 51 per cent of the Greenbushes lithium mine in south-west WA and its fully owned lithium hydroxide refinery in Kwinana, south of Perth. Tianqi owns 51 per cent of the joint venture entity, while TGO owns 49 per cent.
The billion-dollar refinery is ramping up to full capacity during 2023 and IGO expects the joint venture to commit to build a second stage soon.
Essential managing director Tim Spencer said his shareholders had been offered a compelling premium and other stakeholders – including the local Ngadju people – would benefit from the development of Pioneer Dome by a large, well-financed and experienced lithium sector participant.
Essential directors have all backed the bid and the joint venture expects to complete the transaction in May.
Another deal in Australia’s electric battery metals industry was also struck on Monday, as European car manufacturer Stellantis signed an agreement to buy manganese sulphate from ASX-listed Element 25.
Stellantis, the auto giant formed in 2021 from the merger of Fiat Chrysler and Peugeot maker PSA, said it would provide $US30 million in two tranches to Element 25, which is developing the Butcherbird manganese mine in WA and plans to process it at a manufacturing facility in the United States that it hopes to build by 2026.
“Stellantis’ support for Element 25’s high purity battery-grade manganese sulphate project is a fantastic endorsement by one of the world’s largest automakers and supports our plans to become a globally significant long-term supplier of battery materials to meet growing global demand,” Element 25 managing director Justin Brown said.
In early afternoon trading Essential shares were up 39 per cent to 46 cents a share, IGO scrip rose 1.6 per cent to $14.24 and Element 25 was up 14 per cent to $1.09.
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Source: Thanks smh.com