Tesla lithium supplier Albemarle is set for a $4.3 billion takeover of Liontown Resources, an Australian company, as it aims to beef up its supply of the metal for EV makers.
On Tuesday, Albemarle CEO Kent Masters said the company made a revised, non-binding $4.3 billion bid for Liontown, with hopes to strike a deal by mid-2024.
The acquisition would “increase our opportunity to meet rapid and growing lithium demand.”
The location contributes to the quality of the lithium that the Liontown reserves provide, Masters said, and its size will help bolster its ability to meet demand as EV battery makers look to increase electric vehicle production and battery manufacturing.
It has to be approved by shareholders and still needs to be formalized. However, Liontown has agreed to let Albemarle look at private records that contain information that could be crucial to a deal, according to Reuters‘ report on the deal.
This will include a scan of Liontown’s agreement to supply Ford and Tesla with lithium through 2030.
Albemarle would likely have to build processing facilities for Liontown mines if the deal goes through.
Tesla signed a deal with Albemarle several years ago, but it also signed a five-year lithium supply deal with Liontown in February of last year. The deal would see Liontown supply Tesla with Lithium Spodumene Concentrate from the battery metal company’s AU$473 million Kathleen Valley Lithium Project in Western Australia.
The Kathleen Valley mine is expected to start producing lithium spodumene concentrate in 2024 at a rate of 320,000 metric tons every year.
This was set to increase to 700,000 metric tons by 2030.
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