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Albemarle makes $4.3 billion bid for Australian lithium developer Liontown

The world’s biggest lithium producer, Albemarle Corp, has made a $4.3 billion takeover offer for Australian lithium developer Liontown Resources, in a bid to expand its portfolio of battery-grade minerals. Liontown’s board has recommended the improved cash offer of A$3 per share, which is 20% higher than Albemarle’s previous offer of A$2.50 per share made in late March that the target had rejected as too low.

Liontown is one of the largest holders of lithium resources in Australia, with projects in Western Australia and the Northern Territory. Its flagship project is the Kathleen Valley lithium-tantalum project, which has a resource of 156 million tonnes at 1.4% lithium oxide and 130 parts per million tantalum pentoxide. Liontown also owns the Buldania lithium project, the Toolebuc vanadium project, and the Moora gold project.

Albemarle, which is based in Charlotte, North Carolina, is the world’s largest producer of lithium carbonate and lithium hydroxide, which are used in electric vehicle batteries and other applications. Albemarle operates three lithium production sites in Chile, Australia and China, and has a joint venture with Mineral Resources Ltd to develop the Wodgina hard rock lithium project in Western Australia.

The deal is expected to be finalized by the end of September 2023, subject to regulatory approvals and other customary conditions. Albemarle has been granted a limited period of exclusive due diligence as well as to enter into a mutually acceptable scheme implementation deed, Liontown said in a statement.

The deal comes amid a surge in demand for lithium and other battery metals, as the global transition to clean energy accelerates. The price of lithium carbonate has more than doubled this year, reaching $15,750 per tonne in August, according to Benchmark Mineral Intelligence. The demand for lithium is expected to grow by 25% annually over the next decade, driven by the electric vehicle sector.