2021 and beyond, page-4893

Orocobre and Galaxy Resources, two of Australia’s top lithium miners, have completed a $4 billion merger and are on track to become the world’s fifth most-valuable producer of the sought-after electric battery raw material.The combined company – to be named Allkem, subject to shareholder approval – will retain its primary listing on the ASX and have operations spanning brine and hard-rock lithium mining and processing in Australia, Argentina, Canada and Japan.Orocobre CEO Martin Perez De Solay (left) and Galaxy CEO Simon Hay at Galaxy’s office in Perth after finalising details of their $4 billion merger.

Orocobre chief executive Martin Perez de Solay said the tie-up “could not have been put together at a better time”, as global automakers expand their electric vehicle lines and analysts project at least a five-fold increase in global demand for lithium by 2030.“With the merger, we will go further in our commitment to delivering the lithium chemicals that the world increasingly needs to mitigate climate change and carbon emissions,” said Mr Perez de Solay, who will remain CEO of the combined business.“It will give us significant operational, technical and financial flexibility to deliver the full value of our combined portfolio

BHP says electric car era is dawning earlier than expectedLithium prices, which had tumbled sharply since 2018 amid an influx of supply outpacing demand, have rallied this year. While electric vehicles presently account for about 3 per cent of new sales, uptake is lifting in China, the United States and Europe, and governments are unleashing “green” post-pandemic stimulus packages targeting transport electrification.Investors and analysts are also showing renewed optimism about the dawn of the electric vehicle era and are betting billions on the future of lithium products.Macquarie analysts said strong electric vehicle sales and supply shortages, combined with an emerging spot market, are set to drive prices towards previous peaks.Advertisement“We have upgraded our lithium carbonate, hydroxide and spodumene price forecasts by 20 to 35 per cent on average over the next three years,” they said.

BHP cleans up its act as climate pressure mountsBHP, Australia’s largest resources company, has described 2020 as an “inflection point” for the shift to electric vehicles, as Elon Musk’s Tesla sold more than half a million battery-powered cars and sales in Europe more than doubled.In a major portfolio shake-up last week, BHP announced it would exit the oil and gas industry entirely and expand its exposure to “future-facing” commodities including battery ingredients nickel and copper.“By 2030, we expect that a quarter of all sales will be electric vehicles,” said Eddy Haegel, the outgoing president of BHP’s Western Australian mining, smelting and refining operations.“Compared to two years ago, we have upgraded our expectations significantly.”Orocobre on Wednesday reported a 10 per cent increase in annual sales revenue to $US84.8 million ($117 million) for the year to June 30, but posted an after-tax loss of $US89 million, which it partly attributed to a change in the Argentine tax rate.Galaxy Resources swung to a half-year profit of $US64 million on the back of improved pricing for lithium concentrate known as spodumene, up from a $US22 million loss a year earlier.The combined company, Allkem, will be headquartered in Argentina, where Orocobre operates the Olaroz lithium facility and Galaxy operates Sal de Vida.