Australian nickel producer IGO has acquired a 49% stake in Chinese lithium producer Tianqi’s Australian operations, Kallanish reports.

A binding agreement between the two firms was announced on Tuesday whereby IGO will take a non-controlling stake in Tianqi Lithium Energy Australia in a deal valued up to AUD 1.86 billion ($1.4 billion).

As a result, IGO will take a 24.99% indirect interest in the Greenbushes Lithium and Processing Operation and a 49% indirect interest in the Kwinana Lithium Hydroxide Plant, which are both located in Western Australia. IGO states it will finance the deal, expected to close in H1 2021, through a combination of debt, cash and an equity-raising.

Greenbushes, which is also 49% owned by US-based lithium producer Albermarle, is the world’s largest hard rock lithium mine with an output of 764,000 tonnes per annum of spodumene concentrate last year. An expansion project completed in mid-2019 pushed total production capacity to 1.2 t/y, with further expansion options available, states IGO.

The Kwinana plant is one of the first to be fully automated and the only constructed lithium hydroxide plant in Australia, according to IGO. The plant will comprise two trains with a total nameplate capacity of 48,000 t/y of battery-grade lithium hydroxide. Construction on train one is complete and is expected to commence production next year, while train two is under construction and forecast to commission in 2024.

“This is a genuinely transformational transaction for IGO and one that delivers on our strategy to become a global leader in the supply of metals critical for enabling a clean energy future,” says IGO ceo Peter Bradford. “Both Greenbushes and Kwinana are world-class assets with attractive growth profiles that together provide the platform for building a global lithium business.”