The company plans to acquire the interest by way of a subscription for new shares in Lithium HoldCo.
The deal will provide IGO a 24.99% indirect stake in the Greenbushes Lithium Mining and Processing Operation and a 49% indirect interest in the Kwinana Lithium Hydroxide Plant (Kwinana) for $1.4bn.
Greenbushes produces chemical grade spodumene concentrate and Kwinana is an integrated battery grade lithium hydroxide plant with Korean and European offtake partners. Both the operations are in Western Australia.
The transaction is aligned with IGO’s strategy of becoming a globally relevant supplier of metals critical to enabling clean energy.
Furthermore, the deal will see the creation of a joint global lithium partnership between IGO and Tianqi with initial focus on Australia.
Tianqi will own the remaining 51% of Lithium HoldCo which will become the exclusive vehicle for any future investments outside of China for Tianqi and IGO, related to lithium, upon completion of the deal.
IGO CEO and managing director Peter Bradford said: “Both Greenbushes and Kwinana are world-class assets with attractive growth profiles that together provide the platform for building a global lithium business.
“We look forward to working with Tianqi to build a leading global lithium business that will play an important role in supporting the global transition to clean energy technologies, while generating substantial value for IGO shareholders for many years to come.”
Completion of the transaction is subject to various conditions including, but not limited to, Tianqi shareholder approval and satisfaction of other transaction conditions and is expected to take place in the June 2021 quarter.
The transaction will also establish IGO as a clean energy metals investment with a strong ESG brand and all operations in a Tier 1 jurisdiction.
In May this year, Albemarle expressed its interest in acquiring all or part of Tianqi Lithium’s controlling stake in Greenbushes lithium mine.