(Reuters) - Albemarle Corp said on Friday it had finalized an agreement to form a lithium joint venture with Australia’s Mineral Resource Ltd for $1.15 billion.
The deal, announced last month, will give U.S.-based Albemarle a 50 percent stake in Mineral Resource’s Wodgina lithium project in Western Australia which exports unrefined hard rock ore.
The deal comes as demand is booming for lithium to make rechargeable batteries for consumer products ranging from cell phones to electric vehicles, and as regulatory scrutiny in Chile has hindered Albemarle’s growth plans there.
The joint venture will produce 100,000 tonnes annually of lithium carbonate equivalent to feed a lithium hydroxide plant.
Australia’s lithium supply comes from hard rock, which can directly produce hydroxide, while production of hydroxide from Chile’s brines is a more expensive, two-stage process.
As part of the deal, Mineral Resources will retain its iron ore rights, and tantalum rights will stay with a third party.
Albemarle has scheduled a conference call on Monday to discuss the deal.
Shares of Albemarle fell 4 percent to $84.40 at midday, in line with broader markets.
Reporting by Ernest Scheyder; Editing by Richard Chang