Mineral Resources to withdraw from Kemerton lithium processing plant venture with $591m pay day from Albemarle

Albemarle will pay up to $US400m ($591 million) to take full control of the Kemerton lithium hydroxide processing plant after a junior partner decided to pull out of the project. Mineral Resources, founded by Perth billionaire Chris Ellison, will sell its 15 per cent share in the South West facility to the American giant as part of a deal which will also see it axe a $US660m ($974m) plan to take a 50 per cent stake in two lithium hydroxide plants in China. MinRes lithium chief executive Joshua Thurlow described the changes, which were negotiated in February when the companies tweaked a joint partnership, as a “win-win” for both parties. Albemarle recently announced it was investing up to $US1.5 billion ($2.25b) to double lithium hydroxide capacity at Kemerton to 100,000 tonnes a year — enough to produce batteries for 2.4 million electric vehicles annually. It will retain full ownership of its Qinzhou and Meishan lithium processing facilities in China, which MinRes had previously been eager to gain exposure to as it seeks to push deeper into high-value downstream processing. Mr Thurlow said it was testament to the working relationship that the companies had been able to negotiate “mutually beneficial outcomes that deliver value for both sets of investors”. “For MinRes, we’ve unlocked value from our non-integrated Kemerton processing facility, which will provide flexibility to continue expanding our hard rock assets and developing our own integrated lithium conversion assets in Australia and abroad,” he said in a statement to the Australian Securities Exchange. MinRes expects a preliminary study of an Australian lithium battery chemical plant to be completed in the September quarter, adding that building downstream capacity in Australia remains its preference “if the project economics deliver value”. Albemarle chief executive Kent Masters said in a statement the deal would better position both companies to align investments and capital spend. “Albemarle continues to rapidly expand its energy storage business,” he said. “We recently announced an expansion at the Kemerton lithium hydroxide processing facility, with construction about to begin for our 100 per cent-owned processing trains three and four.” The new arrangement is expected to be completed in the December quarter and requires approval from the Foreign Investment Review Board.