2023-05-10 16:57:01
Today, May 10, lithium producers are the Australian company Allkem and the American Livent announced a merger by way of share exchange. As a result, according to the analytical service Fastmarkets, the fourth largest lithium producer in the world will be created with a market share of 7%. The cost of the new company will be $10.6 billion. Under the terms of the deal, the current shareholders of Allkem will own 56% of the combined company, while Livent shareholders will own the remaining 44%. The company’s headquarters will be located in North America, the exact location and name of the new company will be announced later.
According to experts, the deal will allow more reliable supplies of lithium (an important component of batteries for electric vehicles) to American automakers and reduce dependence on Chinese suppliers. Livent supplies this metal to many companies, including General Motors, Tesla and BMW. Allkem’s largest customer is Japanese Toyota. In 2021-2022, lithium prices increased six times, although since November last year they have more than halved, from $80,000 per tonne to $30,000. This is due to a decrease in demand from Chinese manufacturers of electric vehicles. At the same time, according to the forecasts of the industry alliance Li-Bridge, by 2030 the demand for lithium batteries will increase by more than five times.
Other major lithium producers include American Albemarle, Chilean Sociedad Quimica y Minera de Chile, and China’s Ganfeng Lithium and Tianqi Lithium. Allkem mines lithium from several deposits in Argentina, as well as in Australia and Canada. Livent also has production in Argentina and Canada. The companies hope the merger will help them develop these fields more efficiently. By 2027, the combined company plans to produce 250 thousand tons of lithium per year, which will most likely allow it to reach the 3rd place in the world in terms of production of this metal.
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