Albemarle Corporation Announces Agreements for Restructure of MARBL Joint Venture in Australia and Investment by Mineral Resources Limited in Albemarle Conversion Assets in China

Rhea-AI Summary

Albemarle Corporation (NYSE: ALB) has signed definitive agreements with Mineral Resources Limited (ASX: MIN) to restructure their MARBL lithium joint venture in Australia and for MinRes to invest in Albemarle's conversion assets in China. Upon closure, Albemarle will increase its stake in the Kemerton processing plant from 60% to 85%, while MinRes will raise its interest in the Wodgina Lithium Mine from 40% to 50%. In China, MinRes will acquire a 50% interest in Albemarle's Qinzhou and Meishan plants. These agreements aim to enhance growth opportunities and improve resource management, essential for meeting rising lithium-ion battery demands.

Positive

• Albemarle's stake in the Kemerton processing plant increases from 60% to 85%, enhancing operational control.
• MinRes will invest approximately $350 million for its share of capital costs in the joint venture.
• The agreements are expected to improve Albemarle's global lithium resource and conversion capacity.

Negative

• The agreements are subject to regulatory approvals, which may delay execution.

CHARLOTTE, N.C., Feb. 22, 2023 /PRNewswire/ -- Albemarle Corporation (NYSE: ALB), ("Albemarle"), a global leader in transforming lithium and bromine into essential ingredients for mobility, energy, connectivity and health, announced today that it has signed definitive agreements with Mineral Resources Limited (ASX: MIN) ("MinRes") to restructure the parties' MARBL lithium joint venture in Australia ("MARBL") and separately for MinRes to invest in Albemarle conversion assets in China.

"Our Australian lithium assets are core to Albemarle's strategy to build a globally diversified portfolio of best-in-class assets and resources," said Kent Masters, Albemarle CEO.  "Inherent to that strategy is managing our global portfolio to maximize growth optionality and maintain a leading position in a dynamic, growing market. Our restructured MARBL joint venture enables each partner to deliver long-term value to our customers."

"We have a tremendous opportunity ahead of us with the transition to clean transportation and anticipated rapid growth of lithium-ion batteries," said Eric Norris, president of Albemarle Energy Storage. "We expect our joint ventures with MinRes to support our strategy to expand our global lithium resource and conversion capacity for our customers while investing with discipline to ensure the highest returns for our shareholders."

The execution of these agreements follows the announcement of the signing of a non-binding letter of understanding in February 2022.

Transactions Overview

In Australia, upon closing of the restructured MARBL arrangements, which are subject to Australian regulatory approvals:

• Albemarle will increase its interest in the first two conversion trains of the Kemerton processing plant from 60% to 85%. Albemarle will operate Kemerton trains 1 and 2 on behalf of the joint venture.
• MinRes will increase its interest in the Wodgina Lithium Mine Project from 40% to 50%. MinRes will operate the Wodgina mine on behalf of the joint venture.
• Consideration for Albemarle's increased stake in Kemerton will be offset by consideration for MinRes's increased stake in Wodgina.
• Albemarle will supply MinRes's 15% share of spodumene for use by the joint venture at the Kemerton plant from the Greenbushes mine. MinRes will pay market price for this share of Greenbushes spodumene.
• Each of Albemarle and MinRes will market its own share of lithium products converted from Wodgina spodumene.
• Albemarle and MinRes will enter into a commercial agreement for Albemarle to arrange conversion of both parties' shares of Wodgina spodumene. MinRes commits to fund 50% of the capital costs for downstream conversion capacity Albemarle nominates to process Wodgina spodumene. MinRes is expected to pay approximately US$350 million for its initial share of capital costs of this conversion capacity as of closing.   Albemarle is expected to pay MinRes a completion adjustment currently estimated to be US$100 million to US$150 million reflecting the April 1, 2022, effective date.

In China, which is subject to Chinese regulatory approvals:

• MinRes will acquire a 50% interest in Albemarle's 100%-owned Qinzhou and Meishan plants in China. Qinzhou has a designed capacity of 25ktpa. The plant will undergo modifications to be able to convert Wodgina spodumene and is expected to commence that conversion in early 2024. The Meishan plant, which is under construction with a designed capacity of 50ktpa, is scheduled to be commissioned by year-end 2024.  Albemarle will continue to operate Meishan and Qinzhou.

About Albemarle Corporation
Albemarle Corporation (NYSE: ALB) is a global leader in transforming essential resources such as lithium and bromine into critical ingredients for mobility, energy, connectivity, and health. Together with our world-class resources, technical and process knowledge, and safety and sustainability performance, we partner with our customers to pioneer new ways to move, power, connect, and protect. We are committed to building a more resilient world where people and planet thrive. Learn more about Albemarle at www.albemarle.com and at @albemarlecorp on LinkedIn, Twitter, and Facebook.

Albemarle regularly posts information to our website, including notification of events, news, financial performance, investor presentations and webcasts, non-GAAP reconciliations, SEC filings and other information regarding the company, its businesses, and the markets we serve.

Forward-Looking Statements
This press release contains statements concerning our expectations, anticipations, intentions, beliefs, or strategies regarding the future, which constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which are based on assumptions that we have made as of the date hereof and are subject to known and unknown risks and uncertainties that could cause actual results, conditions and events to differ materially from those anticipated, often contain words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "would," "will" and variations of such words and similar expressions. Forward-looking statements may include, without limitation, statements regarding the restructuring of our MARBL joint venture and investment by MinRes, which are subject to certain closing conditions and receipt of regulatory approvals, and the anticipated benefits of such restructuring, timing for commissioning, construction, and production for our Kemerton, Wodgina, Qinzhou, and Meishan plants, and all other information relating to matters that are not historical facts. Factors that could cause actual results to differ materially from the outlook expressed or implied in any forward-looking statement include, without limitation: changes in economic and business conditions; adverse changes in liquidity or financial or operating performance; changes in the demand for our products or the end-user markets in which our products are sold; fluctuations in lithium market pricing; changes in laws and government regulation; and the other factors detailed in the reports we file with the SEC, including those described under "Risk Factors" in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which are available on the investor section of our website (investors.albemarle.com). These forward-looking statements speak only as of the date of this press release. We assume no obligation to provide any revisions to any forward-looking statements should circumstances change, except as otherwise required by securities and other applicable laws.

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SOURCE Albemarle Corporation

FAQ

What are the details of Albemarle's agreement with Mineral Resources Limited?

Albemarle signed agreements to restructure their MARBL joint venture in Australia and allow MinRes to invest in Albemarle's conversion assets in China.

How will the restructuring of the MARBL joint venture affect Albemarle's operations?

Albemarle's stake in the Kemerton processing plant will increase to 85%, providing greater operational control and efficiency.

What financial implications does the investment by Mineral Resources have for Albemarle?

MinRes will pay approximately $350 million for initial capital costs associated with the restructuring.

When is the commissioning of Albemarle's Meishan plant scheduled?

The Meishan plant is expected to be commissioned by the end of 2024.