American specialty chemicals producer Albemarle has just raised its bid to Liontown to A$6.6 billion ($4.26 billion), BNN Bloomberg reports.
The move is part of Albemarle’s efforts to acquire the Australian lithium developer and boost its production and revenue figures.
Liontown bid advancements
Albemarle increased its prior per-share cash offer from A$2.50 in March to A$3, the company announced Monday.
Notably, Liontown backed the new bid from Albemarle. It expressed willingness to endorse the latest bid of a 15% premium to Friday’s close. It also gave the US-based miner a limited exclusive due diligence period.
For context, Liontown’s lithium projects in the country are among the most promising initiatives to date. One of them is the flagship Kathleen Valley project that will open in mid-2024. According to Reuters, it is among the largest and highest-grade hard rock lithium reserves in the world. Moreover, it already inked supply deals with electric vehicle giants like Tesla and Ford.
What’s the big deal?
It is already common knowledge that lithium is one of the critical minerals in electric vehicle batteries.
However, the surging demand for the metal causes supply issues that impede the operation of both EVs and battery makers.
In fact, the International Energy Agency (IEA) forecasts the world to suffer from lithium shortages by 2025. The IEA further estimated that the world needs approximately 2 billion EVs by 2050 to reach its carbon neutrality goals.
Alarmingly, the global market only sold 6.6 million units in 2022 as some electric automakers’ products were selling out, the World Economic Forum reported.
That said, initiatives like Albemarle’s are critical to ensure that there will be enough lithium supply in the coming years. In effect, it will support the shift to EVs and avoid interruptions in the upward trend.
Lithium industry expands
Albemarle’s imminent takeover of Liontown would further demonstrate the remarkable advancements of the lithium industry in Australia.
As the report noted, startups and unrecognized lithium companies have expanded by over ten times amid the growing lithium demand for electric vehicle batteries.
In fact, Albemarle’s move to boost its bid to Liontown occurred following the notable declines in lithium costs and stocks from 2022’s peak.
It is also worth noting that the latest bid signifies Albemarle’s fourth offer in just five months.
Reuters noted that Australian lithium miners’ declining market valuations and cash enticed lading battery material producers and other electric vehicle players to secure supply.
See Also:
- Albemarle expects spike in lithium demand, as Chinese EV market expected to grow 40%
- Albemarle to invest $180m for lithium research centre in the US
- Tesla threatens Core Lithium of potential legal case over failed agreement
- Green Lithium to develop Europe’s first-ever lithium refinery to support up to 1M EV production
- Global supply shortage looms for EV Demand, lithium producers forecast
Liontown witnessed a surge in stocks to 11.5% following the decision to back the latest bid from Albemarle. The rate increase enabled the company to hit its highest stock price since July 14.
