GXY a takeover target, page-10

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Facthunter

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09/12/16

15:58

Post #: 21234029
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Originally posted by airconditioner ↑

Been thinking about this post of Joe's about Albermarle taking a look at Galaxy.

Tianqi and Albemarle would be the 2 most likely partners for Galaxy.
Tianqi bought Jiangsu off Galaxy last year.
Albemarle and Tianqi own Greenbushes as a jv and have agreed to build a processor in Kwinana.
What was weird was that Albemarle are blocking plans to upgrade Greenbushes.
This would seem the logical step after cutting off supply to the independent converters.

Albemarle bought Rockwood in 2014 for $6.2b. They have Chilean brine operation in the Atacama and own Silver Peak in the Clayton Valley, Nevada (hello Tesla).
Their Chilean plant hasn't been as productive as they wanted. Chile had devastating floods last year, there has been political interference (Chile hasn't quite decided if it wasn't to be an enabler or a direct competitor), and legal stoushes with SQM and similar problems in the US.

They have been looking closely at Argentina, which has become a lot more attractive for the lithium biz with the new government. SQM already have a toehold, slowly progressing a jv with LAC.

Albemarle isn't a pure play lithium company, dragging a less profitable chemical portfolio behind them - but they really want to position themselves at the top. They are currently trailing SQM for progress and Joe Lowry loves giving them a dig. They certainly have massive brine experience and the kind of finances to set up SDV with Galaxy without so much as breaking a teeny little financial sweat.

Medium term, Albermarle/Tianqi's processor in Kwinana could become a very viable local client for Mt Cattlin offtake.

If Galaxy enters into some agreement with Albemarle then this could become the beginning of a very profitable relationship for the 2 companies, with the capacity to accelerate GXY's asset development very quickly. I reckon stay tuned on this one. It looks like this may be a very smart move of Albemarle's.

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Should we expect an announcement next week?

GXY Price at posting: 50.3¢ Sentiment: Hold Disclosure: Held
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0 Great analysis

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