Publishing date: Apr 18, 2021 • 1 hour ago • 2 minute read •
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MELBOURNE Australian lithium miner Orocobre Ltd is buying smaller domestic peer Galaxy Resources for $1.4 billion to create the world’s fifth most valuable producer of the key raw material for electric vehicle batteries.
The all-stock deal for A$1.78 billion ($1.38 billion)announced on Monday, which will also establish Australia’s most valuable lithium miner with a A$4 billion market capitalisation, comes as demand for the material is booming amid a jump in global sales of electric vehicles.
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“It’s overwhelmingly positive. On a high level, you have got significant synergies with both businesses having an Argentina base,” said analyst Reg Spencer of broker Canaccord Genuity.
Shares of both companies hit more than three year highs in early trade, with Orocobre gaining about 6% to A$6.56 and Galaxy rising 4% to A$3.75.
Both companies have significant expansion plans, putting the merged company on track to produce more than 130,000 tonnes of lithium carbonate equivalent (LCE), up from around 40,000 tonnes now, with operational synergies and global diversity to make it a major global player, Spencer added.
Orocobre and Galaxy, which operate the Olaroz and Sal de Vida lithium projects in Argentina, respectively, are looking to consolidate their assets in the country.
MELBOURNE -Australian lithium miner Orocobre Ltd is buying smaller domestic peer Galaxy Resources for $1.4 billion to create the world s fifth most valuable producer of the key raw material for. | April 18, 2021
19 April 2021
Australian lithium producers Orocobre and Galaxy are to merge to create what they claim will be the fifth largest pure-play lithium chemicals company in the world, with a market worth of around $4 billion, and lithium operations in Australia, Chile, Argentina, Canada and Japan.
Lithium is one of the central components of lithium-ion batteries. With electrification of transport ramping up and with grid-scale batteries playing an increasingly central role in renewably-powered electricity networks, demand for lithium is expected to soar this decade. Australia is by far the biggest producer of lithium in the world, followed by Chile.
There are two widespread methods of mining lithium: extracting lithium ore spodumene concentrate from hard rock, and extracting lithium carbonate from brine, generally found in inland salt lakes particularly in South America.
By Reuters Staff
2 Min Read
(Reuters) - Australian lithium miner Orocobre Ltd said on Monday it would buy rival Galaxy Resources to form the world’s fifth-largest lithium chemicals company valued at A$4 billion ($3.09 billion).
The deal comes at a time of increasing industry consolidation in the wake of soaring prices for the raw material used in electric vehicle (EV) batteries.
“The merged entity’s growth opportunities in both brine and hard rock position it uniquely to take advantage of expected rising EV demand for lithium,” Galaxy Chairman Martin Rowley said.
Orocobre and Galaxy, which operate the Olaroz and Sal de Vida lithium projects in Argentina respectively, are also eyeing a consolidation of their assets in the country.