MELBOURNE, April 5 (Reuters) - Singapore-listed lithium producer Alliance Minerals Assets Ltd has bought out its Australian joint venture partner Tawana Resources for A$215 million ($165.4 million), the two companies said on Thursday.
The deal is an early sign of consolidation in the red hot lithium sector where more supply is coming online as demand is expected to surge over the coming decade with more electric vehicles hitting the road.
Alliance, which is headquartered in Perth and jointly developed the Bald Hill lithium and tantalum project in Western Australia, will acquire 100 percent of Tawana shares for A$0.37 per share, it said in a statement.
Tawana shares were halted on Thursday. They traded last at A$0.455 a share, valuing the company at about A$229 million.
The transaction is expected to be completed by the fourth quarter of the year.
The new company, which will be listed on the Australian and Singapore exchanges, is set to become Australia’s first new lithium exporter since 2016, when it ships out its first lithium concentrate later this month, Tawana said in a statement.
The new entity has offtake agreements in place with Burwill Commodity Ltd, a joint venture partner of China’s Jiangte Special Electric Motor Co
It has also reached an offtake agreement for its tantalum with Germany’s HC Starck Group.
Alliance shares closed at S$0.34 on Wednesday. ($1 = 1.2999 Australian dollars) (Reporting by Melanie Burton; Editing by Amrutha Gayathri)