IGO has no experience in spodumene processing - I believe the beneficiation of the ore can be complicated although it sounds like they have the Greenbushes operation running on ‘rubber wheels’ with Albemarle as long term 49% owner.
More of an issue might be the fact IGO has no experience in hydroxide processing.
Given the problems even Tianqi has been having at Kwinana, this might mean IGO prefers to stay as a non-contributing owner there?
It will be interesting to see if IGO or any other company does end up taking more of an interest though.
Beyond this with the sale due to complete this quarter there still seems to be a number of conditions still to be met..
This debt being sorted out being one of them?
There’s a reminder in the spoiler from the initial presentation of December 9, 2021 of the conditions in case anyone wants a quick refresh.
Cheers
Chinese group Tianqi has been given a week to hand over the $39m it owes to Perth firm MSP Engineering to the care of a court.
The Court of Appeal today ruled that the money will be held by the court on trust until it decides whether to overturn a Supreme Court summary judgment against Tianqi last month.
Subject to Tianqi paying the sum by April 9, the court will extend a stay of payment while the company’s appeal is heard. A proposal by Tianqi’s lawyers that the money be paid to the court in instalments was rejected.
Both camps welcomed today’s ruling.
Tianqi said it was “very pleased” that the $39m would be paid to the court, “rather than directly to MSP”.
“Tianqi had expressed concern to the court about MSP’s ability to repay the money if Tianqi was successful on appeal,” a spokesman said.
“The requirement to pay the money to the court rather than to MSP provides appropriate safeguards to preserve those funds.”
MSP director Craig Burton said the decision ensured the money his company was still owed for building a lithium processing plant in Kwinana “is finally extracted from Tianqi and held safely by the court”.
“MSP Engineering looks forward to Tianqi complying with this order to pay by April 9,” he said.
Tianqi has argued that it should not have to pay MSP because it has a much bigger damages action against the engineering firm that is under private arbitration.
The Kwinana plant was completed late and over budget in late 2019 but has yet to produce commercially after being mothballed almost immediately to await better lithium markets.
The two companies have engaged in an increasingly bitter public slanging match since MSP said last month it had been forced to wind down its other engineering projects to realise cash to pay subcontractors still owed money on the plant and urged the Foreign Investment Review Board to examine Tianqi’s conduct.
Tianqi responded by highlighting the delays and overruns on the plant under MSP’s supervision and said the WA business could hardly cry poor given it paid $23 million in dividends to directors and other shareholders during construction of the plant.
“Tianqi is focussed on rectifying the issues at the Kwinana lithium hydroxide plant and moving towards production,” it said today. “We expect to award significant rectification contracts shortly and look forward to producing value added lithium product here in Australia.”
Tianqi is emerging from a severe financial squeeze triggered by weak lithium prices and a debt load taken on to fund the purchase of a big stake in Chilean lithium miner SQM three years ago. Under a deal struck in December and due for completion by June, it is selling 49 per cent of the Kwinana plant and an indirect 25 per cent stake in the Greenbushes lithium mine, 250km south-east of Perth, to listed WA miner IGO for $US1.4b.
Kwinana was budgeted at $700m but is likely to cost $1.2 billion by the time a second production train is eventually completed.
IGO Price at posting:
$6.28 Sentiment: None Disclosure: Held
(20min delay)