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Should Albemarle’s proposal becomes binding at that price, the Liontown board intends to unanimously recommend that shareholders vote in favor of it, in the absence of a superior one and subject to an independent expert recommendation, the Australian miner said a day later.
Albemarle said that the potential acquisition of Liontown would raise its capability to meet rapidly growing lithium demand driven by electric vehicles (EVs) and other end markets.
Liontown operates two lithium projects in Western Australia – Kathleen Valley and Buldania.
Production at the Kathleen Valley lithium project is expected to commence in 2024. The project will have the initial capacity to produce spodumene concentrate at a rate of 500,000 tonnes per year, which will then be expanded to 700,000 tpy, according to the company.
Liontown has secured multiple offtake agreements with companies including South Korean battery manufacturer LG Energy Solution, and automakers Tesla and Ford, for supply of spodumene concentrate from Kathleen Valley.
Liontown’s Buldania project is an emerging project with an initial mineral resource of 15 million tonnes of 1.0% lithium oxide, the company said.
Albemarle’s plan to acquire Liontown came amid a backdrop of a weak lithium market.
Chinese lithium prices have mostly been trending downward this year, following the discontinuation of Beijing’s subsidy for EVs at the beginning of this year. The weakness in China’s domestic lithium spot market drags down international prices.
But Albemarle expects spot lithium prices to recover from recent months’ weakness, with its optimistic outlook for demand in the remainder of the year.
The company said in its earnings call in August that it was expecting the lithium market to remain tight in 2024, which should stimulate appetite for spodumene concentrate, an important feedstock for chemical production of lithium.
Fastmarkets’ research division forecasts the lithium market to be in a deficit of 72,400 tonnes of lithium carbonate equivalent (LCE) in 2023, before widening to 82,690 tonnes of LCE in 2024.
Fastmarkets’ fortnightly price assessment of spodumene min 6% Li2O, spot price, cif China was $3,000-3,500 per tonne on August 31, widening downward by $200 per tonne from $3,200-3,500 two weeks earlier, and 59.63% lower than January 5’s $7,900-8,200 per tonne.
Fastmarkets’ daily price assessment of lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price cif China, Japan & Korea was $29-31 per kg on Tuesday September 5, unchanged since August 31, but down by 64.07% from $83-84 per kg on January 3.
Keep up to date with all the lithium price changes and data on our dedicated lithium price page.