https://thewest.com.au/business/mining/igo-in-talks-to-buy-tianqi...

https://thewest.com.au/business/mining/igo-in-talks-to-buy-tianqis-greenbushes-stake-ng-b881741087z
IGO in talks to buy into Tianqi’s Greenbushes lithium mine
Stuart McKinnon and Sean SmithThe West Australian
Mon, 7 December 2020 10:37AM


Spodumene concentrate from the Greenbushes mine is loaded onto a truck for export. Credit: Ian Munro/The West Australian

IGO shares have been halted amid reports the company is in advanced negotiations to buy a stake in the troubled Tianqi Lithium’s Greenbushes lithium mine, south-east of Perth.

The heavily-indebted Chinese company is eyeing a sale or sell-down of its 51 per cent stake in the biggest hardrock lithium mine in the world as it desperately looks to raise cash to avoid collapse.

The Australian Financial Review suggested IGO is looking at a $2b deal linked with Greenbushes.

However, it could well be that any transaction straddles both a minority interest in Greenbushes and a stake in Tianqi’s Kwinana lithium hydroxide plant, which was mothballed shortly after commissioning earlier this year to await better lithium markets.

Greenbushes is owned in partnership with US group Albemarle, which is believed to hold a form of conditional pre-emptive rights over the project.

It seems unlikely given Greenbushes’ strategic importance that Chinese authorities would want Tianqi to entirely quit the mine.
Also, there is doubt over whether Albemarle would be comfortable with IGO, a company without experience in lithium, taking on majority ownership of the project.

And as a comparison, the mooted $2b value of the reported IGO transaction compares to the $US1.3b ($1.7b) paid by Albemarle last year for 60 per cent of Mineral Resources’ Wodgina lithium project in the Pilbara — a considerably smaller and lower grade venture than Greenbushes.

IGO has made clear its strategy of pursuing growth in so-called future-facing commodities linked to the battery and electric vehicle revolution.

However, investors had been expecting it first to sell down its 30 per cent stake in the Tropicana gold mine, 330km north-west of Kalgoorlie, in a deal expected to net the company at least $1b and offer shareholders a significant capital return.

It is understood Citi and Macquarie have been tapped to raise cash for IGO to effect the Greenbushes transaction.