Chris Ellison’s Mineral Resources and US lithium heavyweight Albemarle are expected to formally agree to an extension of the time to complete their landmark $US1.15 billion ($1.7bn) deal over the Wodgina lithium project in the Pilbara.
The duo currently have a deadline of tomorrow to complete the various conditions precedent attached to the deal, which would result in Albermarle emerging as MinRes’s 50-50 partner in Wodgina.
But those conditions, in particular the approval of China’s State Administration of Market Regulation, will not be in place by this weekend. The agreement signed by the two companies late last year allows for the transaction to be extended to as late as December 15, and it is believed the two groups will agree to the maximum possible extension.
While it is taking longer than first hoped to close the deal, and while there has been ongoing softness in the lithium market since the transaction was first announced, there has been no denting of the enthusiasm of each party.
Albemarle chief executive Luke Kissam last month told investors that the company was buying the Wodgina stake with a 20-year view and remained confident in the merits of the deal.
The Wodgina mine was 80 per cent complete as of May and is closing in on maiden production. The Wodgina deal was a landmark for the Australian lithium sector and has helped inspire other potential transactions.
Pilbara Minerals earlier this year signed up Macquarie, the same bank that led the Wodgina process for MinRes, to shop around a stake in Pilbara’s Pilgangoora lithium deposit down the road from Wodgina. That process continues.
Additional reporting: Paul Garvey
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