Tianqi Transaction Information

IGO’s INVESTMENT IN A GLOBAL LITHIUM JOINT VENTURE WITH TIANQI LITHIUM CORPORATION

On 9 December 2020, IGO announced it had entered into a binding agreement with Tianqi Lithium Corporation (Tianqi) to acquire a 49% non-controlling interest in a new joint venture, “Lithium HoldCo1”, through a subscription for new shares. The Transaction will provide IGO with a 24.99% indirect interest in the world-class Greenbushes Lithium Mining and Processing Operation (Greenbushes) and a 49% indirect interest in the Kwinana Lithium Hydroxide Plant (Kwinana), both located in Western Australia.

The transaction is transformational for IGO and is aligned with our strategy of becoming a globally relevant supplier of metals critical to enabling clean energy. It establishes the Company as a leading ASX-listed company focused on the production of clean energy metals, with a high-quality portfolio of Western Australian assets across lithium, nickel, copper and cobalt.

Commenting on the transaction, Peter Bradford, IGO’s Managing Director and CEO said “This is a genuinely transformational transaction for IGO and one that delivers on our strategy to become a global leader in the supply of metals critical for enabling a clean energy future. We see Tianqi, a leader in the global lithium industry and with strong alignment to our strategy, as the ideal partner for IGO. 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.”

TRANSACTION HIGHLIGHTS

  • Greenbushes – tier 1 hard rock lithium mine delivering quality, scale and long life
  • Kwinana – world-class battery grade lithium hydroxide plant with strong ESG credentials
  • Long-term sustainable assets with significant growth optionality
  • Strong near-term production growth underpins cash flow generation
  • IGO will become and unique clean energy metals investment
  • Well-timed acquisition in lithium cycle2
  • Strong partnership with Tianqi – a world leading lithium industry participant3
  • Accretive transaction expected to generate significant shareholder value

TRANSACTION CONSIDERATION

IGO is acquiring a 49% non-controlling interest in Lithium HoldCo through a subscription for new shares for US$1.4bn (A$1.9bn)4

The transaction is being funded via A$766M in new equity (completed), A$1,100M in new debt facilities (secured), with the balance funded with cash available on the IGO balance sheet.  

TRANSACTION TIMETABLE

Subject to the completion of remaining conditions, IGO expects the transaction to complete during the June Quarter 2021.

Event Date5  
Announcement of the acquisition of 49% of Lithium HoldCo 9 December 2020 Completed
Launch of equity raising and binding debt documentation signed 9 December 2020 Completed
Completion of the placement and institutional entitlement offer component of the equity raising 18 December 2020 Completed
Completion of the retail entitlement offer component of the equity raising 22 January 2021 Completed
Tianqi shareholder approval Early Feb 2021 Completed
Completion of Tianqi internal restructure June 2021 Quarter  
Targeted signing of the SHA and Transaction completion
June 2021 Quarter  

KEY DOCUMENTS

For more information on the transaction, please see the following documents:

1Currently named TL Energy Australia (“Lithium HoldCo”), a UK incorporated holding company with expected Australian tax domiciliation. Parties to agree a new name prior to completion
2Based on IGO’s analysis of the market and CRU analysis
3Tianqi Lithium Corporation and CRU Consulting.
4Based on an AUD/USD exchange rate of 0.74
5These timings are indicative only and subject to variation. IGO reserves the right to alter the timetable at its absolute discretion and without notice, subject to the Listing Rules, Corporations Act and other applicable laws

MAKING A
DIFFERENCE

ANALYST CENTRE

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