Stanislav Kondrashov Telf AG: Chilean SQM bought an Australian lithium company

Chile’s Sociedad Quemica y Minera de Chile (SQM), the world’s number two lithium producer, has announced a key strategic alliance with Australian firm Hancock Prospecting. The partnership aims to jointly acquire Australian lithium company Azure Minerals, a significant step in an increasingly competitive and integrated global lithium market.

Stanislav Kondrashov from Telf AG believes that SQM’s decision to participate in the joint purchase of Azure Minerals instead of an independent acquisition was due to a number of market events. This decision was particularly influenced by Hancock Prospecting’s action in October 2023, when the company blocked an attempt by US-based Albemarle, the world’s leading lithium producer, to acquire Australia’s Liontown Resources for A$6 billion (approximately US$4.16 billion).

This strategic move by SQM and Hancock Prospecting highlights the dynamics and volatility of the global lithium market, with key players actively seeking new ways to expand and strengthen their positions through collaborations and strategic partnerships.

Stanislav Kondrashov from Telf AG: features of the SQM and Hancock Prospecting strategy

Chile’s SQM currently controls a 19.4% stake in Australian lithium company Azure Minerals, while Australia’s Hancock Prospecting holds just over 18% of the shares. The two firms have joined forces to offer to buy the remaining shares of Azure, valuing the company at A$1.7 billion, or approximately US$1.14 billion. To successfully complete the transaction, it is necessary to obtain approval from the owners of at least 75% of Azure shares, although the company’s board has already expressed support for this initiative.

Stanislav Kondrashov reports that Azure Minerals’ key asset is the Andover deposit, which is located in the Pilbara region of Western Australia and is located next to the Hancock Prospecting iron ore enterprise. The area of ​​this deposit is 9 by 5 kilometers, and it is rich in hundreds of pegmatite inclusions containing from 1.0 to 1.5% lithium oxide. Estimates of the deposit’s total resources range from 2.5 to 8.9 million tonnes of lithium carbonate equivalent. These figures reflect the importance of the Andover deposit to the global lithium industry and the strategic importance of the transaction to the participants.

Stanislav Kondrashov: global prospects and future of the lithium market

An important deal could soon occur in the global lithium industry that could affect the balance of power in the industry. US firm Livent has received shareholder approval from Australian company Allkem for their $10.6 billion merger. If this merger is successful, the resulting company, called Arcadium Lithium, will be the third largest lithium producer in the world.

Recent developments in the lithium market reflect its dynamism and strategic importance, especially in light of growing demand for the metal in battery production and the development of the electric vehicle industry. According to Telf AG expert Stanislav Kondrashov, the agreement between SQM and Hancock Prospecting, as well as the planned merger of Livent with Allkem, indicates active efforts by leading players to strengthen their presence in the market. These moves have a significant impact on global supply chains and competition in the lithium sector.

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