Albemarle has agreed to acquire China-based lithium converter Guangxi Tianyuan New Energy Materials in a $200m deal, through its subsidiary Albemarle Lithium UK.

Planned to close in early next year, the transaction is subject to customary closing conditions.

Established in 2017, Tianyuan owns a lithium processing plant, which is located close to the Port of Qinzhou in Guangxi.

The facility is equipped to produce battery-grade lithium carbonate and lithium hydroxide. It has a production capacity of up to 25,000tpa of lithium carbonate equivalent (LCE).

The conversion plant is currently in the commissioning stage and is slated to start commercial production during the first half of next year.

Albemarle CEO Kent Masters said: “The acquisition of Tianyuan, which owns and operates a newly constructed lithium processing plant, aligns with our strategy to pursue profitable growth in line with customer demand.

“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.”

Earlier this year, Albemarle said that it will expand the capacity at its lithium production facility at Silver Peak, Nevada, US.

The move comes as demand for the ultralight battery metal is expected to increase with automobile companies moving towards the production of more electric vehicles (EVs).