Tianqi Lithium Corp (天齊鋰業) has agreed to buy an Australian lithium explorer in a deal that could accelerate production of enough supply of the metal for about 10 million electric vehicles.
The A$136 million (US$94.1 million) bid for Sydney-listed Essential Metals Ltd, made through Tianqi’s joint venture with Australian miner IGO Ltd, includes the Pioneer Dome project in Western Australia, an undeveloped mine with estimated total reserves of more than 100,000 tonnes of lithium.
While that is small by the Chinese lithium giant’s standards, it comes as global automakers are desperate for supply of the key battery metal as they scramble to meet ambitious electric vehicle production targets.
Photo: Bloomberg
The shortage has sent lithium prices and company valuations soaring over the past year, and Tianqi’s bid values Essential Metals at a 45 percent premium to its last closing price.
The Pioneer Dome mine would probably not start producing lithium until the second half of this decade, based on its timeline.
However, Tianqi Lithium Energy Australia — the joint venture — has the capital and experience to speed that up, Essential Metals said.
The deal “provides an opportunity to accelerate lithium exploration to bring new resources to production,” IGO acting chief executive officer Matt Dusci said.
The acquisition, backed by the Essential Metals board, would need shareholder approval.
Tianqi Lithium Energy Australia owns a majority stake in one of the biggest lithium mines in the world — Greenbushes, in Western Australia — and was the first operator to build a battery-grade lithium hydroxide refinery in Australia.
Separately, Ford Motor Co and SK Innovation Co’s battery unit canceled plans to build an electric-vehicle battery plant in Turkey amid rising global interest rates and weaker electric vehicle demand in Europe, the Korea Economic Daily reported.
The two companies withdrew an initial accord that was signed in March last year, the paper said yesterday, citing unidentified sources.
The plant was slated to start operation as soon as 2025 with annual production capacity of 30 to 45 gigawatt-hours and was part of a push by Ford to produce 2 million electric vehicles per year by 2026.
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