Lithium suppliers for electric car batteries Tesla and Toyota merge to become the world’s third largest player in the industry with projects at two mines in James Bay.
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“The goal is to be big enough and have enough expertise to be able to process the lithium into the finished product. Few companies in the world are able to do this outside of China. We’re trying to be independent,” said Denis Couture, head of Canadian operations at Allkem, in an interview with the Journal.
Australian manufacturer (AKE.AX) announced its merger with US-based Livent Corp (LTHM.N) this morning. The new company will be headquartered in North America at an undisclosed location.
Allkem has a $380 million project at James Bay to operate a lithium mine to produce spodumene concentrate.
Livent, in turn, is a 50% co-owner with the Government of Quebec in Nemaska Lithium, which plans to open a secondary processing facility in Bécancour and also operate a mine in James Bay. These projects require investments of several hundred million dollars.
“Both of our projects will continue to progress in the same way. Not a single project will be delayed, nor will anyone lose their job. We’re moving as quickly as we can in both places,” Mr Couture said.
Photo by Valerie Lesage
Denis Couture, head of Canadian operations at Allkem.
The combined capitalization of the two companies is $10.6 billion. The merger would allow the new giant to have over $1.4 billion in cash to further its projects.
“At Allkem we had the financial resources for the mine,” explains Denis Couture. But further processing can be four to five times more expensive than a mine. Together (with Livent) it will enable us to drive change.”
Mr. Couture reiterated that the desire to process in Quebec is even greater today. The planned plant in Bécancour will not have the capacity to process the concentrate from the Allkem mine (formerly Galaxy); it is only used for Nemaska.
“Either we make it bigger or we open another one in Quebec or somewhere else. Those are all ideas that we’re going to put on the table,” said Mr. Couture.
No discussions have taken place with the Quebec government: efforts in the coming months will focus on the transaction and its shareholder approval by the end of this year.
“This transaction confirms the strategic importance of lithium in the battery industry supply chain and will allow Allkem and Livent to advance their projects in Quebec. The Nemaska project in Bécancour remains the same and is still under development; It will enable the first conversion of lithium in Quebec,” Mathieu St-Amand replied to the Office of the Minister for Economy, Innovation and Energy.
The Allkem project in James Bay received federal government approval last January. That of the Provincial is still awaited; Talks with the Crees are ongoing. Allkem originally hoped to start up the mine in early 2024, but the project has been delayed.
Five lithium mining projects are in the development phase in Quebec and are well positioned to become a major supplier on a global scale. Sayona has two (Moblan and Authier) and Critical Elements has another (Rose Tantale), while Nemaska and Allkem have the other two.
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