Allkem and Livent Corp have agreed to a $10.6 billion all-stock merger on Wednesday, creating the world's third-largest lithium manufacturer, highlighting surging demand for the battery metal used in electric vehicles (EVs).
Combining US-based Livent with Allkem in Australia creates a four-continent industrial giant that executives say would deliver the additional expertise needed to expand supply of the metal to an increasingly hungry automotive sector, including Tesla, General Motors, and BMW.
Allkem and Livent run lithium brine facilities in Argentina that are around 10 km (6.2 miles) away, and they are both developing hard rock lithium mines in the Canadian province of Quebec that are less than 100 km (62 miles) apart. Livent CEO Paul Graves believes that combining the companies will speed up the development of those initiatives.
Allkem, which also mines hard rock lithium in Australia, has a chemical conversion facility in Japan, and is a pioneer in the emerging field of direct lithium extraction (DLE), which is seen as a tantalizing prospect for producing more battery metal faster than traditional mining methods.
Allkem shareholders will receive one share in the combined entity for each share they own under the agreement and the company will eventually own 56% of the new firm. For each existing share of Livent, shareholders will receive 2.406 shares in the new company.
Graves will lead the new firm as CEO, with Allkem's Peter Coleman serving as chairman. The unnamed corporation will be listed on the NYSE and headquartered somewhere in the United States.
Analysts believe the new company's global mining and processing assets are solid growth indicators.
Despite the South American country's socio economic troubles, Graves believes the new company's growth prospects in Argentina are particularly promising.
He also urged the US to adopt a free trade agreement with Argentina, which would make Argentine lithium eligible for EV tax incentives, which are central to the Biden administration's 2022 strategy.
When all expansion projects are considered, the combine would become the world's third-largest lithium producer by volume, after Albemarle Corp of the United States and SQM of Chile. Ganfeng Lithium Group and Tianqi Lithium Corp of China are other important competitors.
In Canada, E3 Lithium Ltd (TSXV:ETL) (OTCQX:EEMMF) has the largest Measured and Indicated lithium resource. E3 Lithium's combined resources, including the Clearwater project, are being developed in Alberta on the backbone of the experienced and sophisticated oil and gas industry, allowing the company to expedite its development.
Manufacturing High Purity, Battery Grade Lithium
The mineral property resource company focused on the exploitation of its large mineral potential in Alberta, Canada, has developed a proprietary Direct Lithium Extraction (DLE) process.
E3 Lithium is progressing with the development of its field pilot project, which will showcase ion-exchange direct lithium extraction technology in real-world operational settings. E3 plans to significantly derisk its Alberta lithium project by demonstrating the process at a pilot scale as it approaches the commercial size of 20,000 tonnes/year of lithium hydroxide monohydrate production.
E3 Lithium's Facility Application for its 2023 field pilot plant was recently approved by the Alberta Energy Regulator (AER). The AER license permits E3 to build and operate the equipment required to carry out the direct lithium extraction pilot, which is scheduled to commence operations in the third quarter of 2023.
The field pilot plant will be built in E3's Clearwater Project Area, east of Olds, at the first well drilled as part of E3's 2022 first drill program. E3 released the criteria and schedule for the field pilot on February 2, 2023.
E3 will provide updates on its field pilot throughout 2023.
E3 Lithium has upgraded its mineral resource to 16.0 Mt LCE of Measured & Indicated and 0.9 LCE of Inferred Mineral Resources.
Natural Resources Canada data show that Canada now has 3.2 Mt of M&I lithium resources in hard rock deposits, implying that E3's 16.0 Mt of LCE M&I is the country's largest M&I lithium resource.
E3 Lithium just announced their fourth-quarter and fiscal-year 2022 results. Highlights from last year included receiving $27 million from the Government of Canada's Strategic Innovation Fund, signing a $5 million strategic agreement with Imperial Oil, and signing a memorandum of understanding with Pure Lithium, which produced a lithium metal battery using E3's lithium concentrate.
E3 Lithium successfully manufactured its first batch commercial scale sorbent, which is critical to the success and commercialization of its ion-exchange DLE technology, and drilled the first two brine production wells at the Clearwater Project to evaluate lithium and sampled three wells, confirming the aquifer's producibility and lithium concentrations in its proposed production area over the past year.
The E3 Lithium 43-101 Technical Report: Lithium Resource Estimate, Bashaw District Project, Central Alberta has been filed by the Company.