Debt-laden Tianqi Lithium has secured a lifeline from Perth-based nickel and gold miner IGO, which will invest $1.4 billion in the unit that controls Greenbushes, the world's largest hard-rock lithium mine.
China's Tianqi, one of the biggest producers of lithium chemicals used in electric-vehicle batteries, was due to repay a total $1.88 billion by the end of November but secured a one-month extension, buying it time.
The Chinese company said it plans to use the proceeds mostly to repay $1.2 billion of the principal on a loan taken out for an M&A deal, as well as associated interest.
Following the agreement with Australia's IGO, Tianqi said it plans to extend its loan repayment deadline to Nov. 25, 2022.
Reuters reported on Monday that IGO was in talks to acquire a stake in Greenbushes. read more
A source with knowledge of the deal said on Tuesday that the 49% stake in TLEA would give IGO 24.99% in Greenbushes plus 49% in Tianqi's suspended Kwinana lithium hydroxide processing plant, which is also in Australia.
The deal, which needs the approval of the Australian Foreign Investment Review Board, will be put to Tianqi shareholders on Jan. 5, the company said in a separate filing.
U.S.-based Albemarle Corp (ALB.N), which holds 49% in Greenbushes and previously said it was keen to take full control, said on Monday it was closely following the situation.
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