US Chemical Giant Lands Major Deal for Australian Lithium to Power Batteries

  • 23-Feb-2023
  • Journalist: Jaideep

US: Mineral Resources, one of the world's leading Lithium miners, has announced a new deal with Abermarle, one of the biggest producers of Lithium for electric vehicle batteries. The agreement will see Mineral Resources gain a presence in China, as well as secure supplies and processing capabilities. It will involve a restructuring of the two companies' joint venture.

The Lithium industry is global, and Australia is an integral part of it. Eric Norris, President of American firm Abermarle, spoke with AAP to affirm this fact. He highlighted the importance of Australia's role in the wider market for his company's specialty metal.

"Much of the electrification we're talking about can't happen without Western Australia," he stated.

"The politics are irrelevant because the world is short of Lithium and needs it."

According to Mr Norris, the move to electric vehicles in the big car markets of the US and Europe is underway, but it will take time for it to be realized completely.

"We need to continue, as a global leader, to be relevant to our Chinese customers in the Chinese market as well as those outside of China," he stated.

MinRes shares rose significantly during afternoon trading, jumping 1.5% to $85.21 from $1.30.

China is the biggest EV market globally and is responsible for producing much of the world's battery components.

Mr Norris declared that electric vehicles are still the primary impetus, however there is a rising interest in grid-scale batteries for energy storage as well as classic supply to markets for electronic gadgets and power tools.

"China's going to keep growing and the US is going to grow rapidly," he stated.

MinRes will receive fifty percent stake in Albemarle's Qinzhou and Meishan plants in China provided that regulatory approval is obtained, in exchange for Albemarle funding the building of a processing plant in Kemerton, WA.

Albemarle, a global leader in the Lithium industry, announced plans to increase its stake in the Kemerton plant to 85 percent. The Kemerton plant will be fuelled by Greenbushes, the world's largest hard-rock Lithium mine. When operational, the Kemerton plant is expected to become one of the largest Lithium production facilities globally, with part of its volume intended for markets outside of China.

MinRes is set to increase its interest in the joint Wodgina Lithium Mine Project from 40% to 50%, taking on the role of operating the mine located in Pilbara, Australia. This move comes as Kemerton, a subsidiary of MinRes, is expected to make use of US laws that unlock lucrative tax credits for producing energy-efficient appliances, electric vehicles, and solar panels.

MinRes, an Australian-based company, is leading the world in Lithium mining after securing a deal with Albemarle - a renowned battery chemical production corporation. The agreement will see Qinzhou convert Wodgina spodumene by early 2024 with a capacity of 25,000 tonnes per annum. Furthermore, the Meishan plant which is currently under construction and has a designed capacity of 50,000 tonnes per annum is expected to be completed and commissioned by end of 2024.

According to MinRes managing director Chris Ellison, this landmark agreement will further strengthen MinRes’s standing as one of the leading suppliers for Lithium resources in the world.

MinRes is expanding its battery chemicals business, and they're partnering with Albemarle to become one of the world's largest integrated Lithium chemical suppliers to auto manufacturers. MinRes and Albemarle will be marketing their share of Lithium products converted from Wodgina spodumene. While Albemarle also has access to brine Lithium deposits, Mr Norris believes that rock will remain the most accessible source for mining purposes.

MinRes is committing to providing $US350 million ($A513 million) in initial funding for downstream conversion projects that utilize Wodgina spodumene. "We also continue to study options to invest in capacity for future downstream Lithium production in Australia," Mr Ellison stated.

Albemarle Corp. has reached a deal with Australia's Mineral Resources Limited that could see the former pay an estimated $US150 million ($A220 million) when the transaction is finalized, pending approvals from Australian authorities. In anticipation of this, Albemarle forecasts its Lithium sales will increase by at least 30% this year and remains open to acquiring additional assets in Western Australia.

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