According to its chief executive officer, the largest lithium producer in the world, Albemarle, is looking to close on a buyout of its Australian rival Liontown Resources by the middle of 2024.
Earlier this week, Albemarle issued a revised, non-binding $4.3 billion bid for the rival firm, as it searches for additional supplies of the metal which is of vital importance to the production of batteries for electric vehicles and other electronics. The bid was just the latest move produced by a surge of interest in lithium assets in Australia as the world looks to transition away from fossil fuels, and toward clean energy.
Based out of North Carolina, Albemarle is already a dominant force in the mining and processing of the rare earth metal in Australia, and the proposed deal is seen as just one more means of securing its dominance in the sector within the region.
In a Tuesday call with investors, Albemarle CEO Kent Masters noted that for the company, the proposed Liontown deal and the acquisition of their rival’s Kathleen Valley lithium deposit will, “increase our opportunity to meet rapid and growing lithium demand.”
He added, “What makes it a world class asset is the quality, the size and the fact that it’s in Western Australia.”
The offer is non-binding, as if accepted it must then be formalized and approved by the company’s shareholders. Liontown is allowing Albemarle to review some of its private records as part of the due diligence process, which will include a review of Liontown’s deals to supply lithium to Ford, Tesla, and other automakers through 2030.
Masters said, “That’s one part of due diligence, to go and understand those contracts.”
If the Liontown deal closes, according to Masters and other executives at Albemarle, the company will probably need to construct processing facilities for the product from the Kathleen Valley mine. However that mine is expected to begin producing 320,000 metric tons of lithium spodumene concentrate by next year, and forecasts predict it may produce up to 700,000 metric tons per year by the year 2030.
In pre-market trading, Albemarle was down 1% to $197.99.
