IGO has made its first foray into the lithium market, acquiring a stake in two operations in Western Australia.
IGO has acquired a 49 per cent non-controlling stake in Tianqi Lithium Energy Australia through a subscription for new shares in Lithium HoldCo.
The Greenbushes lithium mine in Western Australia is the world’s biggest and highest grade hard rock lithium mine. supplied
The stake will give IGO a 24.99 indirect interest in the Greenbushes Lithium Mining and Processing Operation and a 49 per cent indirect interest in the Kwinana Lithium Hydroxide Plant for a total consideration of $US1.4 billion ($1.9 billion).
IGO will fund the deal through a combination of $1.1 billion of new debt facilities, an equity raising of up to $766 million, and existing cash reserves of between $85 million and $149 million.
“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. We see Tianqi, a leader in the global lithium industry and with strong alignment to our strategy, as the ideal partner for IGO,” said IGO managing director and chief executive Peter Bradford.
“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.”
The deal is expected to be completed in the June 2021 quarter.
