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https://thewest.com.au/business/min...s-and-albemarle-will-help-cut-risk--c-9883196

Fitch Ratings says restructure of partnership between MinRes and Albemarle will help cut risk
Danielle Le MessurierThe West Australian
Mon, 27 February 2023 12:27PM




MinRes' Wodgina lithium mine Credit: MinRes

A restructure of the joint venture between Chris Ellison’s Mineral Resources and US group Albemarle and investment in Chinese lithium assets by MinRes will help cut risk, according to global ratings agency Fitch.
It follows news last week the diversified resources company was proposing to purchase a half-share in two lithium hydroxide plants in China from Albemarle, despite Mr Ellison admitting investment in China was a risk given geopolitical and trade tensions.
As flagged last year, the two companies are also restructuring the existing joint ownership of the Wodgina lithium mine in the Pilbara and the Kemerton plant in WA’s South-West.

Fitch Ratings in a note on Monday said the agreements would help MinRes become one of the world’s largest integrated lithium chemical suppliers.

It said the overall effect would have a “neutral” impact on MinRes’ credit profile, noting the company was largely influenced by its $3 billion Onslow iron ore project investment “which we expect to intensify over the next two years”.
“We believe the execution risk associated with the extension of the China-based lithium facilities is manageable, as Albemarle has experience in constructing processing plants in China,” Fitch analysts wrote.
“As such, we believe the new agreement will mitigate the risk associated with declining availability of external converting facilities and uncertainty in toll contract renewals.”

The restructure of the companies’ MARBL lithium joint venture in WA sees Albemarle’s share of Wodgina reduced from 60 per cent to 50 per cent, while its ownership of Kemerton jumps to 85 per cent from 60 per cent
MinRes will also increase its interest in the Wodgina lithium mine in the Pilbara to 50 per cent from 40 per cent, offsetting Albemarle’s increased stake in Kemerton.
MinRes shares were down 5.8 per cent, or $4.93, trading at $79.80 at 12.28pm.