PERTH (miningweekly.com) – US lithium major and ASX-listed Mineral Resources (MinRes) have announced plans to restructure the MARBL lithium joint venture (JV), in Australia, and for MinRes to invest in Albemarle conversion assets in China.
Under the restructuring agreement of the MARBL JV, MinRes would increase its interest in the Wodgina lithium mine from 40% to 50% and would continue to remain as operator, with the mine now to be governed by a standalone JV agreement.
Albemarle will increase its interest in the first two conversion trains of the Kemerton lithium hydroxide processing plant from 60% to 85%, and Albemarle will operate Kemerton trains 1 and 2 on behalf of the JV.
Consideration for Albemarle's increased stake in Kemerton will be offset by consideration for MinRes' increased stake in Wodgina.
Albemarle will supply MinRes' 15% share of spodumene for use by the JV at the Kemerton plant from the Greenbushes mine. MinRes will pay market price for this share of Greenbushes spodumene.
Furthermore, each of Albemarle and MinRes will market its own share of lithium products converted from Wodgina spodumene.
The JV parties have each committed to convert their respective share of Wodgina spodumene concentrate, to feed four 25 000 t/y conversion trains, into lithium battery chemicals through Albemarle-owned conversion assets or using third-party tollers. Under this conversion arrangement, Albemarle will arrange conversion of Wodgina spodumene concentrate on behalf of MinRes.
Each party will fund their proportionate share of the cost of the conversion assets, with conversion cost payments to be made in stages. MinRes will make an initial $350-million payment immediately following receipt of regulatory approvals for the Wodgina and Kemerton restructure, with other payments to be made as conversion capacity is developed and provided.
Albemarle is expected to pay MinRes a completion adjustment currently estimated to be $100-million to $150-million reflecting the April 1, 2022, effective date.
The Kemerton and Wodgina transactions are conditional on Albemarle obtaining approval from the Foreign Investment Review Board (FIRB) to increase its ownership interest in Kemerton and Western Australian Ministerial consent for the parties to change their ownership interests at Wodgina.
Under the second agreement, MinRes will acquire a 50% interest in Albemarle's 100%-owned Qinzhou and Meishan plants in China.
Qinzhou has a designed capacity of 25 000 t/y, and the plant will undergo modifications to be able to convert Wodgina spodumene and is expected to commence that conversion in early 2024.
The Meishan plant, which is under construction with a design capacity of 50 000 t/y is scheduled to be commissioned by year-end 2024. Albemarle will continue to operate Meishan and Qinzhou.
The second transaction is subject to Chinese regulatory approvals.
MinRes told shareholders that considering access to conversion as a whole, MinRes estimates its 50% share of total funds to develop and/or acquire conversion assets or obtain access to conversion services through the conversion agreement to obtain a capacity of 100 000 t/y, of which half would be attributed to MinRes, to be about $660-million, implying an attractive capital intensity of $13 200/t.
“We are delighted to have reached these binding agreements, which cement MinRes’ place as a world leader in lithium mining and leverage our partner Albemarle’s strong track record in battery chemical production,” said MinRes MD Chris Ellison.
“MinRes is proud to operate in Western Australia, a jurisdiction that leads the world in ethical mining practices and is backed by governments focused on growing the battery minerals supply chain.
“We’ve always been committed to giving back to the local community, including by working in partnership with the Traditional Owners of the land on which we operate to deliver long-lasting and sustainable benefits. We also continue to study options to invest in capacity for future downstream lithium production in Australia.
“By growing our battery chemicals business and expanding into global chemical marketing, MinRes will become one of the world’s largest fully integrated lithium chemical suppliers to auto manufacturers, capitalising on the increasing demand for sustainable battery mineral products.”