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Albemarle boss still in the market for Liontown

Brad ThompsonReporter

Aug 30, 2023 – 6.53pm

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Albemarle chief executive Kent Masters considers the battery chemical giant’s $5.5 billion bid for aspiring lithium producer Liontown Resources a live offer, despite no meaningful discussions between the two parties for the past five months.

“I would say it’s a standing offering. We’ve not pulled it,” he said on Wednesday of the spurned $2.50 a share bid. The Tim Goyder-chaired Liontown is getting on with building what will be its flagship Kathleen Valley mine, having rejected its suitor in March.

Albemarle boss Kent Masters meets workers at the company’s lithium hydroxide plant at Kemerton in WA. Sarah Henderson

Albemarle is also happy to have parted ways with Chris Ellison’s Mineral Resources in a lithium processing venture in mainland China.

Mr Masters clarified Albemarle’s sprawling WA strategy following a visit to the company’s lithium hydroxide plant at Kemerton, south of Perth, on Tuesday.

Albemarle has signed off on doubling the size of Kemerton to 100,000 tonnes a year in a move that will take its lithium processing investments in WA past $4 billion. It is building a $140 million accommodation village at Australind, south of Kemerton, to house the 1000 workers needed for the expansion.

RELATED QUOTES

MINMineral Resources

$71.380 -0.21%

1 year1 day

Sep 22Mar 23Aug 2355.00077.00099.000

Updated: Sep 1, 2023 – 12.47pm. Data is 20 mins delayed.

View MIN related articles

LTRLiontown Resources

$2.625 -3.49%

Sep 22Mar 23Aug 231.1002.2003.300

PLSPilbara Minerals

$4.610 -1.28%

Sep 22Mar 23Aug 233.3004.4005.500

The New York-listed company remains on the hunt for more lithium mines, and is willing to invest from the exploration stage to mines already in production.

Mr Masters said parting ways with MinRes on their processing joint venture while they remained co-owners of the Wodgina lithium mine suited Albemarle. The revised deal resembles Albemarle’s co-ownership with China’s Tianqi and IGO Limited in the world-class Greenbushes mine that supplies Kemerton.

“We had a joint venture, and there were parts of it I didn’t like and parts of it that Chris [Ellison] didn’t like it,” Mr Masters said. “It took us some time, we were dancing for a while around that and trying to find out the right landing spot. I like where we ended up.

“I control my downstream assets, I control my customers, I can control the quality to my customer. If I make a promise to the customer, it’s within my control to deliver it.”

Albemarle was assumed to be one of dozens of parties interested in partnering with Pilbara Minerals in a lithium hydroxide plant that could access up to hundreds of thousands of tonnes a year of spodumene from the planned Pilgangoora expansion.

But Mr Masters ruled Albemarle out of the running. “We need resource long term, right? And I like to own it. I don’t want to say never, but it is not something we’re actively engaged in.”

Albemarle’s share price has slumped to $US190 from as high as $US334 in the past year, mirroring the volatile fortunes of lithium prices. That should become less pronounced as the market matures.

The chemical engineer turned executive said the weaker share price would not dampen Albemarle’s appetite for new lithium mines, with WA a preferred jurisdiction.

Additional resource

“We are an integrated player by strategy,” he said. “So we want to be in the resource and then the conversion, and that way we control the quality. And if the market moves over time between hydroxide and spodumene, we don’t care because we have both of those.

“We’ve been building conversion because we felt like we had the resource to get us to the end of the decade, and that’s still the case. But now I’m caught up, [and] now I need more resource.

“We always knew we had to pivot and look for an additional resource. That’s for the next decade, but now’s the time to be looking for it and to secure it.”

Big lithium players in WA including Pilbara Minerals, MinRes and Liontown are evaluating producing an intermediate product that is about 20-40 per cent lithium (rather than spodumene, which is about 6 per cent purity) or, trying to make the more specialised hydroxide.

Liontown boss Tony Ottaviano told The Australian Financial Review this month that an intermediate product was in the wheelhouse of a mining company, but hydroxide was the domain of experienced chemical manufacturers.

Mr Masters said hydroxide plants would need modifications to handle any intermediate product and that Albemarle had reviewed the options. “No one’s done it. There is no intermediate market for a sulfate or anything like that at the moment, [but] that could develop,” he said.

“If you did half of it in Australia, you need someone on the other end to build an asset to do the other half, and therefore a partner. There’s some challenges with it, but there’s merit in the strategy.”