China’s rapid buildout of electric vehicle battery capacity could itself run out of energy. Capacity will be twice this year’s demand, according to commodity research group CRU. That finding suggests demand for lithium will be more muted than anticipated by bulls. These include US chemicals group Albemarle.
The world’s leading lithium producer is closing in on an all-cash deal for Australia’s Liontown Resources. This is worth A$3 per share or A$6.6bn ($4.3bn) in total. Despite weak spot lithium prices, down 61 per cent this year, Albemarle still had to pay up. Its previous offer in March was A$2.50.
Liontown will now open its books. Albemarle wants Kathleen Valley, the fifth largest hard rock lithium resource in Australia with 5.4mn tonnes. Australia matters to the US producer. It already has large stakes in the first and third largest mines there.