- Mineral Resources announced agreement to sell half its WA lithium project to global group Albemarle.
- The exclusive agreement, worth $A1.58 billion, is expected to lead to a joint venture.
- Mineral Resources shares were up 23%.
Shares in Mineral Resources surged after the miners announced a deal to sell a 50% stake in its Wodgina lithium project in the Pilbara region to global battery metals group Albemarle for $US1.15 billion ($A1.58 billion).
A short time ago, the shares were up 23% to $15.37.
The exclusive agreement is expected to lead to a joint venture between Mineral Resources and US-based Albemarle to develop the Western Australian lithium project to help supply demand material to build electric car batteries.
The push to electric vehicles has driven strong interest in lithium in Australia, helping drive a resurgence in the market caps of mid tier miners. There are now seven lithium-related companies in the 50 mid-tier ASX miners list.
Wodgina is a world-class hard rock lithium deposit with an estimated mine life of more than 30 years.
Chris Ellison, Mineral Resources (MRL) Managing Director, says the deal is a good fit between the corporate cultures and skillsets of the two companies.
“MRL is widely recognised as a leading provider of mining services and mine site operations in Australia along with having a high quality mine to ship logistics supply chain in the Pilbara,” he says.
“Our proven local Western Australian capability is extremely well complemented by Albemarle’s proven technical downstream processing expertise and their international marketing capabilities in lithium and other energy storage minerals.
“Our organisations share the same vision to develop Wodgina, a tier one asset, as a world class, 30-plus year integrated lithium operation together.”
Luke Kissam, Albemarle’s CEO, says the agreement is consistent with a corporate strategy of pursuing opportunities to accelerate and de-risk organic growth.
“We feel confident in leveraging this world-class lithium resource with an experienced and knowledgeable mining company like MRL to help meet the growing demands of our global customers,” he says.
In 2018, Mineral Resources increased revenue 16% to $1.7 billion. Net profit after tax was up 35% to $271.8 million.
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