Albemarle (NYSE: ALB) wants to sell its stake in Australia’s Liontown Resources (ASX: LTR) after billionaire Gina Rinehart’s company Hancock Prospecting blocked in October the world’s top lithium producer’s A$6.6 billion ($4.3bn at today’s rates) takeover bid.
US-based Albemarle has priced the roughly 96 million shares it holds in the Australian lithium developer at around A$121 million in a block trade run by JPMorgan, a term sheet showed on Wednesday.
The offer price of A$1.26 to A$1.32 per share is a discount of 7.4%-2.9% to Liontown’s last traded price of A$1.36 on Wednesday. Shares had closed as high as A$3 in the days prior to Albemarle’s bid withdrawal.
Perth-based Liontown confirmed Albemarle’s intentions to local media. The company owns one of the most promising early-stage lithium projects in Australia, Kathleen Valley, located 680 km north-east of Perth in Western Australia’s premier mining district.
Kathleen Valley is considered one of the world’s largest and highest-grade hard rock lithium deposits with mineral resource is estimated in 156 million tonnes at 1.4% lithium oxide and 130ppm tantalum oxide.
The project, on track to begin commercial production in mid-2024, is forecast to initially produce around 500,000 tonnes a year of spodumene concentrate expanding to 700,000 tonnes annually in six years.
Liontown already has supply agreements with Tesla and Ford Motor, as well as with South Korean-based LG Energy Solution.
Hancock Prospecting is now the lithium junior’s largest shareholder with a 19.9% stake.
Rinehart owns shares in other lithium producers such as Patriot Battery Metals (ASX, TSX: PMT) and Delta Lithium (ASX: DLI), but the main focus of her investment is iron ore.
Job cuts, expansions halt
Separately on Wednesday, Albemarle said it will cut jobs and defer spending on a massive refinery project in South Carolina as part of a wide-ranging plan to slash costs amid falling lithium prices.
Supply of the battery metal over the past year outpaced demand, causing an oversupply that has dragged prices down.
The miner said it plans to spend $1.6 billion to $1.8 billion in 2024, down from about $2.1 billion it invested last year.
“The actions we are taking allow us to advance near-term growth and preserve future opportunities as we navigate the dynamics of our key end-markets,” chief executive Kent Masters said in the statement. “The long-term fundamentals for our business are strong and we remain committed to operating in a safe and sustainable manner.”
In all, Albemarle expects to save $95 million annually, with $50 million coming in 2024
Source: MINING.COM – Read More
