Albemarle
Corporation
(NYSE:ALB),
an
American industrial company producing lithium chemicals acquired
Rockwood Lithium which previously merged with Talison Lithium. It
has lithium resources in the Salar
de Atacama,
Chile; Silver
Peak,
NV, USA; Greenbushes,
Australia. In 2014 Albermarle Corp. agreed to pay $6.2 billion in
cash and stock for Rockwood Holdings Inc. which included the Clayton
Valley, Rockwood Lithium mine. The Silver Peak area is one of the
oldest mining areas in Nevada as this area produced substantial
amounts of silver, gold and other minerals. In 1967 the Rockwood
Lithium mine began operations to mine lithium by method of low cost
evaporation ponds and has produced lithium since then. This general
area is surrounded by lithium-enriched tertiary rhyolite tuffs and
lithium-bearing sediments, as well as active geothermal systems.
Over time, the lithium has become mobilized from these sources and
deposited into the ground water. In 2010 the Rockwood Lithium mine
received a $28.4 million grant from the U.S. Department of Energy to
expand and upgrade the production for battery grade usage. It is
estimated that since initial production began the Rockwood Lithium
mine produced over 150,000 tons of lithium and in ground reserve
estimates of 382,000 tons of lithium. Australia’s largest lithium
mine, Greenbushes, is majority controlled by China’s Tianqi
Group.
Tianqi owns a 51-percent stake in Talison Lithium, which runs the
mine, while Albemarle now owns a 49-percent stake in the company via
its acquisition of Rockwood. Talison Lithium also has a lithium
brine project located in the Atacama Region III, in Chile. This
prospective exploration project consists of seven salars (brine
lakes and surrounding concessions). Five of the salars are
clustered within a radius of approximately 30kms and are 100% owned
by Talison Lithium and its Chilean partners. Tianqi
Lithium Industries Inc.
(SHE:002466)
also bought 2.1 per cent of Sociedad Quimica y Minera de Chile
(ADR)(NYSE:SQM)
for $38 a share — more than a 50 per cent premium to the company’s
share price. Tianqi is a direct competitor to SQM, and establishing
a foothold in the company’s shares might be a precursor to the
Chinese entity’s drive to gain control over Chile’s No. 1
lithium producer. Paying such a high premium over market suggests
there is a great deal of strategic value to Tianqi in the
acquisition. Tianqi Group HK Co., Limited is based in Hong Kong.
Tianqi Group HK Co., Limited operates as a subsidiary of Chengdu
Tianqi Industry Group Co., Ltd. Albemarle is planning to expand its
lithium carbonate equivalent capacity to 165,000 tonnes by 2021 from
89,000 tonnes in 2017. Albemarle
Corporation
has developed a novel technology that would allow it to increase
annual lithium production in Chile on a sustainable basis to as much
as 125,000 metric tons of lithium carbonate equivalent without
requiring additional brine pumping at its facility in the Salar de
Atacama. The move is part of the company’s efforts to beef up
efficiencies and sustainability of its Atacama operations. As a
result, Albemarle has asked the Chilean Economic Development Agency,
Corfo to increase its lithium production quota. Albemarle noted that
it intends to construct and start-up additional lithium carbonate
capacity in Chile in the early 2020s once the present expansion
projects are completed and operate at full capacity. Projects
currently underway are expected to raise the company’s total
annual production capacity in Chile to more than 80,000 metric tons
of lithium carbonate equivalent by 2020. Albemarle has been
expanding production to help keep up with rising lithium demand: In
early 2017, it announced that it received approval from the Chilean
authorities to extract enough lithium to increase its annual Chilean
battery-grade lithium carbonate production from 70,000 metric tons
(MT) to 90,000 MT over the next four years. This modest increase
came on the heels of a huge increase, as in early 2016, it received
approval to hike this number from 24,000 MT to 70,000 MT. In March
2017, it announced an expansion at its joint venture in Greenbushes
that will more than double that operation's lithium carbonate
equivalent (LCE) production capacity from 80,000 MT per year to more
than 160,000 MT per year. Albemarle has a 50% interest in what's
produced at this JV. This expansion is slated to begin in Q2 of
2019. Albemarle could also have a potentially very promising new
lithium source coming on line in the future. In the fall of 2016, it
announced an agreement with Bolland Minera S.A. for the exclusive
exploration-and-acquisition rights to a lithium resource in
Antofalla,
within the Catamarca Province of Argentina. Albemarle said at the
time that it believed this resource would be certified as the
largest lithium resource in Argentina.
