IGO Ltd said on Wednesday its $1.4 billion deal to acquire a stake in Tianqi Lithium’s Australian assets had been completed, hailing a “transformational transaction” for the company.
The Australian nickel miner has taken 49% in a joint venture (JV) with China’s Tianqi that gives it 25% in the Greenbushes lithium mine and 49% in the Kwinana processing plant in Western Australia.
While the JV will initially focus on those assets, it will be the “exclusive vehicle for lithium investments outside China for IGO and Tianqi,” IGO said in a filing.
The deal – first announced in December – gives debt-laden Tianqi, one of the world’s biggest lithium producers, a further financial boost after a recent surge in prices for the battery metal.
The JV will have a five-member board comprising two directors from Tianqi, including the chair, two from IGO and one independent, said IGO, adding that first lithium hydroxide from Kwinana was expected in the second half of 2021.
Commissioning of the plant – expected to produce 48,000 tonnes per year – began in 2019 but was halted in early 2020 as Tianqi flagged liquidity problems.
The partners are appointing a lead contracting firm to complete rectification work at Kwinana, IGO said.
The original contractor, Perth-based MSP Engineering, has been locked in a payment dispute with Tianqi.
(By Tom Daly; Editing by Louise Heavens)