Albemarle expands Greenbushes footprint

Leading lithium producer Albemarle Corporation has expanded its footprint in the South West after acquiring a neighboring Greenbushes tenement under a $30 million deal.

Albemarle struck the deal with Sydney-based Lithium Power International (LPI) to buy its subsidiary Western Lithium, which owns a large tenement in Greenbushes adjacent to Albemarle's Greenbushes lithium mine 250 kilometers south of Perth.

Prior to Albemarle's $30 million cash offer, LPI was looking to spin off its Western Lithium subsidiary and had made "significant progress" towards an initial public offer.

But LPI scrapped its de-merger plans due to subdued capital market conditions and the attractive cash offer from Albemarle.

LPI’s Greenbushes exploration tenement spans more than 600 square kilometers and is directly adjacent to Albemarle and Tianqi Lithium Corporation's jointly owned Greenbushes open-pit mine.

“Albemarle Lithium continues to build its Australian portfolio of assets with the announcement of a binding agreement to purchase Western Lithium, a wholly owned Australian subsidiary of Lithium Power International,” a spokesperson from Albemarle Australia said.

“The addition of Western Lithium to its Australian portfolio is consistent with Albemarle’s disciplined strategy to responsibly grow the company’s global resource base.

“Albemarle continues to review and invest in short- and long-term global lithium resource and conversion opportunities to maintain a leading position in a dynamic and growing market, and to deliver lasting value to our customers.”

The funds from the acquisition will be used to progress financing and construction of LPI’s flagship Maricunga lithium brine project in Chile.

Albemarle will withhold $1 million of the $30 million cash sale until certain tenement applications are granted within 18 months of competition among other conditions.

“This agreement with Albemarle provides LPI with immediate value for our Western Lithium subsidiary company,” LPI chief executive Cristobal Garcia-Huidobro said.

“Despite the significant progress we had made towards an IPO of Western Lithium in the past months, this asset realisation will provide a significant uplift to the pre-money valuation of our Western Australia asset portfolio.

“It will add significant cash to the Company’s balance sheet and is non-dilutionary to LPI shareholders, as the financing process of our flagship Maricunga project in Chile continues moving forward."