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Albemarle sells Liontown stake amid scaling back operations

kemerton, lithium, albemarle, WA

Three months after it withdrew its $6.6 billion takeover bid of Liontown Resources, Albemarle is looking to sell its four per cent stake in the company.

After almost a year of discussions, Albemarle confirmed in September last year that it would move forward with its Liontown acquisition after submitting a best and final proposal of $6.6 billion.

A month later, the US lithium giant withdrew its takeover bid, citing growing complexities associated with the proposed transaction and the downward trend in lithium prices as the reasons.

It was also speculated that Hancock becoming Liontown’s largest shareholder in October played into Albemarle backing out of the deal.

As reported by The Australian Financial Review, JPMorgan is now seeking to sell Albemarle’s stake in the company, which equals 96 million Liontown shares for about $120 million.

The offer price is ranging between $1.26 and $1.32 per share, which is a 7.4–2.9 per cent discount to Liontown’s last traded price of $1.36 on January 17.

The news comes as Albemarle announces plans to reduce costs by scaling back spending during 2024. It plans to spend $1.6–$1.8 billion this year, at least $300 million less than 2023.

The lithium major described the new spending level as “a re-phasing of larger projects in the near term to focus on (projects) that are significantly progressed, near completion and in startup”.

Albemarle plans to finish commissioning the Meishan lithium conversion facility in China and Trains 1 and 2 activities at the Kemerton lithium conversion facility in Western Australia, with the construction of Train 3 also a focus.

The company will also prioritise securing permits to reopen its Kings Mountain lithium mine in North Carolina, US, and defer spending at the Richburg mega-flex lithium conversion facility in South Carolina.

By introducing these cost-saving measures, Albemarle seeks to save about $95 million per annum, with more than $50 million being realised this 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,” Albemarle chief executive officer Kent Masters said.

“The long-term fundamentals for our business are strong and we remain committed to operating in a safe and sustainable manner. As a market leader, Albemarle has access to world-class resources and industry-leading technology, along with a suite of organic projects to capture growth.”

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