Australia's IGO in talks to buy US$1.5b stake in lithium mine from China's Tianqi: sources

[SYDNEY] Australian nickel-gold miner IGO is in negotiations to buy a minority stake worth close to US$1.5 billion in a vehicle holding Tianqi Lithium's stake in the Greenbushes lithium mine, sources told Reuters.

China's Tianqi, one of the world's top producers of lithium chemicals used in electric-vehicle batteries, urgently needs the proceeds from the sale to repay loans that were due for repayment at the end of November.

Representatives for Tianqi and IGO did not immediately return requests for comment. On Monday afternoon, Perth-based IGO requested a trading halt for its shares until Dec 9, pending a material acquisition.

Tianqi, which alongside Albemarle operates the Greenbushes lithium mine in Western Australia, last week negotiated with its banking syndicate a repayment extension on US$1.88 billion of loans that were used to acquire a 23.8 per cent stake in Chilean miner SQM in 2018 and were due Nov 29.

Earlier this year, the Chinese company appointed Grant Samuel to find a buyer of the stake, while Standard Chartered is advising IGO, both sources said.

IGO will fund its purchase, which according to the two sources is worth less than A$2 billion (S$1.98 billion), with existing cash and debt, while Macquarie Capital and Citigroup are advising on a potential capital raising that would partly fund the deal, the second source said.

The acquisition includes a stake in Greenbushes - the world's largest hard-rock lithium mine - one of the sources said. The second source said it also included other assets, mostly in Australia.

Both sources asked not to be identified because the details of the deal are private and have not been signed.

REUTERS