Albemarle Corporation (ALB), a leader in the global specialty chemicals industry, announced that it has signed an Exclusivity Agreement with Mineral Resources Limited in relation to the potential creation of a 50/50 joint venture (JV) to own and operate the Wodgina hard rock lithium mine and ultimately develop an integrated lithium hydroxide operation at the resource site.
Wodgina, located in the Pilbara region of Western Australia, is a world-class hard rock lithium deposit, with an estimated mine life of over 30 years. The proposed JV, which remains subject to negotiation of definitive documents, would combine Albemarle’s world-class lithium production and marketing expertise with Mineral Resources Limited’s leading regional presence and mining capabilities. Under the terms of the Agreement, Albemarle would manage the marketing and sales of lithium hydroxide produced by the JV via Albemarle’s long term agreement strategy.
The purchase price for Albemarle’s 50% interest in the JV would be USD 1.15bn, which Albemarle expects to fund with available cash and new credit facilities. It is expected that the transaction will be accretive to Albemarle’s earnings.
“This Agreement is consistent with our corporate strategy of pursuing M&A opportunities that can accelerate and de-risk our organic growth strategy,” said Luke Kissam, Albemarle’s CEO. “We feel confident in leveraging this world-class lithium resource with an experienced and knowledgeable mining company like MRL to help meet the growing demands of our global customers.”