American lithium giant Albemarle has bid to acquire Australian lithium developer Liontown Resources Ltd for US$4.3Bn.

American lithium giant Albemarle announced a non-binding bid of US$4.3Bn (A$6.6Bn) to acquire Liontown Resources Ltd (“Liontown”). Liontown is currently developing the Kathleen Valley and Buldania spodumene projects in Western Australia, with Kathleen Valley expected to come online in 2024. The decision still requires Australian regulatory approval, as well as final approval by the board of Albemarle, and by Liontown shareholders. The updated bid comes after Liontown rejected an offer of US$3.7Bn (A$5.5Bn) made by Albemarle in March 2023. If the updated bid is successful, it would mean Albemarle will further expand its ownership of lithium mineral supply in Australia, adding to the Greenbushes and Wodgina operations. Elsewhere in the world, Albemarle also expanded its lithium portfolio, acquiring a 4.9% share of Canadian lithium mineral project developer Patriot Battery Metals.

The acquisition bid by Albemarle shows another example of the downstream sector looking to secure reliable sources of lithium feedstock. As demand for lithium continues to grow rapidly, concerns over the expansion of upstream supply continue to permeate the industry. Albemarle is also positioning itself to take advantage of the United States’ Inflation Reduction Act (IRA) which allows companies to provide subsidies on EV’s constructed with material produced in the USA or in a country with which the USA has a free trade agreement (FTA), of which Australia is one. The acquisition of Liontown would give Albemarle ownership of two lithium assets; Kathleen Valley, scheduled to be producing within a year and with a capacity of approximately 660kt of spodumene concentrate, and Buldania, currently in development. In future, Project Blue expects to see similar developments in the industry, with mineral projects in USA FTA-compliant jurisdictions likely to be primary targets for upstream acquisition.