PERTH (miningweekly.com) – ASX-listed Mineral Resources (MinRes) and its joint venture (JV) partner Albemarle Corporation will amend the terms of the MARBL JV to simplify the commercial arrangements between the two companies and ensure each has the flexibility and focus required to deliver value for their shareholders in an evolving market.

Under the amendments, MinRes’ share of the Wodgina lithium mine will increase to 50% with the Australian company to remain the operator of the mine, while Albemarle will take full ownership of the Kemerton lithium hydroxide plant, which it currently operates.

Albemarle will pay MinRes an estimated $380-million to $400-million including the net consideration for MinRes’ share of Kemerton and completion adjustments at Wodgina and Kemerton.

Under the updated agreements, MinRes will no longer invest in any Chinese conversion assets with Albemarle and will not make any payments to Albemarle for joint downstream investments.

MinRes will enter a transitional tolling arrangement with Albemarle to convert Wodgina spodumene until the end of June 2024 to allow MinRes to continue to build its team in China. MinRes will transition to market its own share of Wodgina spodumene concentrate and lithium battery chemicals within two months of the completion date and has established an office and warehouse in Ningbo, China.

“These changes are a win-win for both parties, with MinRes and Albemarle remaining great JV partners in the world-class Wodgina lithium mine, while maximising flexibility to focus on the strengths of our businesses,” said MinRes lithium CEO Josh Thurlow.

“It’s a testament to our working relationship that we were 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.”

The miner told shareholders that further decisions on MinRes’ future downstream investments were set to be made by the end of calendar year 2023, with a preliminary study of an Australian lithium battery chemical plant expected to be completed in the September quarter.

Building downstream capacity in Australia remains MinRes’ preference if the project economics deliver value, said Thurlow, adding that the company would continue working with state and federal governments on refining their strategies to ensure Australia was cost competitive in the current global environment.

Investments elsewhere in the region are also under consideration.

Albemarle CEO Kent Masters said on Thursday that the agreement positioned each company to better align its planned capital investments and assets.

“Albemarle continues to rapidly expand its energy storage business. Construction of the Meishan lithium hydroxide processing plant is progressing well, with completion now expected in early 2024. We also recently announced an expansion at the Kemerton lithium hydroxide processing facility, with construction about to begin for our 100%-owned processing trains three and four.”

Other key aspects of the February 2023 agreement remain in effect, including the April 1, 2022, economic effective date and joint ownership of the Wodgina mine, with Albemarle and MinRes to each own a 50% share upon closing.

Completion of the arrangements is expected in the December quarter and is dependent on approval from the Foreign Investment Review Board.