Albemarle Buys China Lithium Company

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Specialty chemical supplier Albemarle Corp. announced yesterday that it has agreed to purchase Guangxi Tianyuan New Energy Materials Co., a start-up that recently finished building a lithium processing plant in southwestern China.

The deal, which will cost Albemarle U.S. $200 million, appears focused on helping to meet demand for lithium derivatives from China’s rapidly expanding electric vehicle fleet. Lithium hydroxide and lithium carbonate are used to make batteries used in electric vehicles, while lithium hydroxide is also used to make soap thickeners formulated into most of the world’s lubricating greases.

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Albemarle is based in Charlotte, North Carolina, United States, and is already one of the world’s largest miners of raw lithium and one of the largest suppliers of processed lithium derivatives. Tianyuan was founded in 2017 and is currently commissioning its first lithium converter plant, a facility in the port city of Qinzhou with capacity to process 25,000 metric tons per year of lithium carbonate equivalent.

Albemarle officials said the facility can produce battery grade lithium carbonate and lithium hydroxide.

“The acquisition of Tianyuan … aligns with our strategy to pursue profitable growth in line with customer demand,” Albemarle CEO Kent Masters said in a news release. “This will be a key component of our next wave of projects designed to increase our conversion capacity in a capital-efficient manner in the coming years. As the global transition to cleaner energy rapidly develops, this added lithium capacity will enable us to help our customers achieve their growth and sustainability ambitions.”

Sales of automobiles powered solely by battery and plug-in hybrids that still have internal combustion engines have risen rapidly in recent years. Although they still amount to only a fraction of sales of new vehicles powered by internal combustion engines, analysts predict EV sales will continue to accelerate as governments around the world see conversion of auto parcs as one of the main ways to combat climate change. A growing number of governments have resolved to prohibit sales of new vehicles powered by internal combustion engines in coming decades.

That trend is expected to greatly increase demand for lithium used in batteries, although some companies are working to develop batteries that would not use the white metal.

The lubricant industry has been another major consumer of lithium since between two-thirds and three-quarters of the world’s greases contain conventional or complex lithium soap thickeners. Availability for the grease industry has tightened in recent years, at least partly because of competing demand from EVs. Prices have risen, and some grease producers have begun shifting to other types of thickeners.

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