Australia has consolidated its position in the ranks of major lithium players with the friendly cross-border merger between Allkem and New York-listed Livenet. The move stands to create a $14.8bn lithium player with mines in Western Australia, Canada and Argentina and processing plants in the UK, US Japan and China.
The merger signals the rapid evolution of the lithium sector, which just several years ago was highly fragmented and played at the more speculative corner of the stock market. But as car markers scrambled to lock in lithium contracts to underpin battery manufacturing, the supply chain also professionalised, transforming players from explorers into producers with a global footprint.
BHP has so far stayed out of the lithium, given the iron ore major plays a scale game, chasing vast-mines over a single site that have a long life of operation.
Rio Tinto, which had briefly been linked to Allkem, has dipped its toe in the sector through the undeveloped Rincon lithium project in Argentina, but the miner is exploring moving up the production value chain.
Wesfarmers is spending more than $1bn building out its integrated lithium project with Chilean giant SQM.
ASX-listed Allkem is itself the product of merger, following the combination of Orocobre and Galaxy two years ago. Following that deal is when Allkem came on Livenet’s radar, and the two companies had been talking about a combination since March last year.
The bulk of Allkem’s development operations are focused in Argentina, while the hard rock Mt Cattlin mine in Western Australian underpins sales.
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