Tianqi Lithium Energy Australia Pty Ltd (TLEA), a China-Australian-led joint venture between Tianqi Lithium and IGO, has bid to acquire Australian lithium developer, Essential Metals Ltd according to a recent IGO ASX announcement.
Tianqi Lithium is a Chinese company that is a major player in the lithium industry. It has teamed up with IGO, an Australian mining company, to form a joint venture to acquire Essential. The joint venture has acquired a bid of A$136 million ($94.07 million) arrangement scheme.
The schme consideration represents a significant premium of:
- 44.9% to the closing Essential share price of A$0.345 per share on 6 January 2023
- 45.7% to the 1-month Essential of A$0.343 per share up to and including 6 January 2023
Lithium in electric vehicles
Lithium is a key component in producing electric vehicle batteries, and the demand for the mineral is expected to increase significantly in the coming years. Essential, based in Western Australia, is a leading developer of lithium deposits in the country.
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Tianqui-IGO profile
Tianqi Lithium declared that the IGO deal was finalised on July 5, 2021.
With this deal, Tianqi and IGO established a new lithium joint venture focusing on the global market called Tianqi Lithium Energy Australia Pty Ltd. (TLEA). TLEA’s registered capital is held by Tianqi Lithium, which owns 51% of the company, and IGO Ltd, which owns 49%.
Among TLEA’s assets is a 51% investment in Greenbushes, South West region of Western Australia, the largest, highest-grade, and least expensive hard rock lithium mine in the world, as well as a 100% stake in the fully automated battery-grade lithium hydroxide factory in City of Kwinana, Perth WA. The plant consists of two separate production trains with a combined nameplate capacity of 48 ktpa of lithium hydroxide suitable for batteries.
1.2Mtpa of chemical-grade spodumene concentrate and 0.14Mtpa of technical-grade spodumene concentrate can be produced annually at the Greenbushes lithium mine. About 1.34Mtpa of spodumene concentrate may be produced annually.
Image&Source: Tianqui Lithium – Greenbushes, WA
TLEA is taking measures to complete the installation and operation of the Kwinana plant’s first production train, intending to produce the first ton of goods by the end of 2021 and gradually ramp up to the nameplate capacity of 24 ktpa by the end of 2022.
Image&Source: Tianqui Lithium – Kwinana plant
Essential’s portfolio
Image: Essential Mentals – Dome North Lithium Mineral Resource
Essential Metals Limited (ASX: ESS) is a lithium exploration company that owns 100% of the Pioneer Dome Project in Western Australia.
The Mount Marion and Bald Hill lithium projects are nearby and have a 450 km2 total area. 14 spodumene lithium deposits in Australia comply with JORC standards, and Pioneer Dome has a JORC resource of 11.2 Mt @ 1.16% Li2O1 is defined. Additional stakes in early-stage exploration projects for lithium, nickel, and gold are held by ESS.
Essential’s share price is soaring
On Monday, shares of Essential Metals, a lithium exploration and development company listed on the Australian Securities Exchange (ASX), saw a significant price increase of 40%. This sudden surge in the company’s stock price has caught the attention of many investors and market watchers, wondering what could be behind this dramatic rise.
There are a few potential reasons for the sudden increase in Essential Metals’ share price.
One possibility is that the company has made a major announcement or disclosed new information that has caused investors to take notice. For example, suppose Essential Metals had announced the discovery of a large lithium deposit or secured a major contract to supply lithium to a major consumer. This could have significantly increased investor interest in the company.
Another possibility is that the overall demand for lithium, a key component in producing electric vehicle batteries and other high-tech products, has been increasing. This could have led to a rise in the price of lithium and, in turn, a corresponding increase in the value of companies that produce or explore the metal.
Finally, the increase in Essential Metals’ share price is likely due to speculation or investor enthusiasm. In a volatile market, it is common for investors to buy and sell stocks based on their perceived potential for future growth rather than on the company’s current performance or fundamentals.
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