Albemarle positioned for Greenbushes buy

Albemarle Corporation could have the whip hand in a further consolidation of Western Australia’s lithium industry, as its partner in the Greenbushes mine, Tianqi Lithium, seeks to sell a stake in its Kwinana refinery and/or the mine itself.

An Albemarle spokesperson today would not rule out using the company's first right of refusal to increase its share of Talison Lithium, operator of the Greenbushes mine.

“We really don’t know how this will play out for Tianqi,” the spokesperson told Business News. 

“Talison is a great asset that many companies would love to have an interest in.”

It follows a recent Reuters report in which chief executive Eric Norris was quoted as saying Albemarle would be interested in increasing its stake from the current 49 per cent.

Tianqi owns the remaining 51 per cent of Talison.

Other companies highlighted as potential buyers have included Rio Tinto.

Albemarle’s right of refusal would only apply to the mine, not the refinery.

Any foreign bidder would need to navigate Foreign Investment Review Board approval in an environment where the regulator is keeping a much tighter leash on incoming cash.

The Australian arm of Tianqi has been restricted because of its Chinese parent company’s big debt burden.

Commissioning of stage one of the Tianqi refinery is understood to have been put on hold in recent months because of a lack of cash.

Builder MSP Engineering achieved practical completion in November, but the two parties have been in Supreme Court dispute with Tianqi owing about $36 million.

Added to that, it was recently reported that Tianqi owes Talison $120 million in back payments for lithium deliveries.

Albemarle revealed in a recent earnings presentation that it would be slowing development of its capital expenditure projects, which include the Kemerton lithium refinery in a joint venture with Mineral Resources.

“We are slowing work on these projects without demobilising to conserve cash and to reassess the demand requirement when the battery industry recovers,” a spokesperson said at the time. 

“We have also maintained our options to defer additional capital or accelerate these projects depending on market conditions.”

In its first major consolidation move, Albemarle acquired a 60 per cent interest in Mineral Resources’ Wodgina lithium assets last year.

A planned refinery to be built at Wodgina was delayed due to low prices, while three newly-built concentrators were also switched off.

A further Kwinana refinery, to be built by Chilean business SQM, and Wesfarmers, was also delayed.