IGO has doubled down on its clean energy metals strategy by revealing plans to purchase a 49 per cent stake in Tianqi Lithium Energy Australia for $1.9 billion.
The acquisition will provide IGO with a 25 per cent interest in the Greenbushes lithium mining and processing operation in Western Australia – the largest operating lithium mine globally.
The company will also receive a 49 per cent interest in Tianqi’s Kwinana lithium hydroxide plant, also located in Western Australia.
IGO stated that Lithium HoldCo would become the “exclusive vehicle” for IGO and Tianqi’s lithium investments outside of China.
IGO managing director and chief executive Peter Bradford described the investment as “transformational”, stating that it was in line with the company’s strategy to supply clean energy minerals.
“This is a genuinely transformational transaction for IGO and one that delivers on our strategy to become a global leader in the supply of metals critical for enabling a clean energy future,” he said.
“We see Tianqi, a leader in the global lithium industry and with strong alignment to our strategy, as the ideal partner for IGO. Both Greenbushes and Kwinana are world-class assets with attractive growth profiles that together provide the platform for building a global lithium business.
“We look forward to working with Tianqi to build a leading global lithium business that will play an important role in supporting the global transition to clean energy technologies, while generating substantial value for IGO shareholders for many years to come.”
IGO flagged organic growth options at both Greenbushes and Kwinana, which are on the pathway to responding to future lithium demand via clean energy technologies including electric vehicles and renewable energy.
Tianqi founder and chairman Jiang Weiping also welcomed the company’s partnership with IGO.
“Following an extensive global search, IGO was the clear choice to become our long-term partner to establish a new global lithium business given our shared vision for a clean energy future and unique combination of complementary skillsets,” he said.
Tianqi had suffered financial blows earlier this year due to softening lithium prices.
It considered offloading its Australian lithium and processing assets due to its $US3.5 billion ($4.7 billion) debt owed to China’s CITIC Bank in April on account of its stake in Chilean miner Sociedad Química y Minera (SQM).
Lithium HoldCo will include five directors, with two nominees each appointed by IGO and Tianqi along with an independent director appointed by the latter.