Albemarle Corporation

Albemarle Corporation will own 60 percent of a joint venture in western Australia for the production of lithium.

Albemarle Corporation has closed a deal with Mineral Resources Limited under an asset sale and share subscription agreement made last December, and amended in August.

The agreement creates a 60/40 joint venture in Western Australia between Albemarle and MRL, respectively, and is named MARBL Lithium Joint Venture.

Albemarle operates an extensive saltwater brine production and chemical manufacturing facilities in Columbia and Union counties.

Under the agreement, Albemarle has acquired a 60 percent interest in MRL's Wodgina spodumene mine in Western Australia for $1.3 billion, consisting of a cash payment of $820 million, and the transfer to MRL of a 40 percent interest in two 25 ktpa lithium hydroxide conversion trains being built by Albemarle at Kemerton in Western Australia.

MARBL will manage the operation of the Wodgina mine and the Kemerton conversion trains. Albemarle will market all of the output from the Wodgina mine and Kemerton lithium hydroxide conversion trains.

The 50 ktpa lithium hydroxide conversion capacity at Kemerton is currently scheduled to be commissioned in stages starting in the first half of 2021. The timing and location of any further lithium hydroxide conversion capacity that may be developed by the joint venture will be based on market demand and will be funded 60/40 by Albemarle and MRL.

Based on current market conditions, the Wodgina mine will idle production of spodumene until market demand supports bringing the mine back into production.

"We are pleased to announce the formation of this joint venture with Mineral Resources. Over the past year, we have worked closely together and are even more confident that our investment will produce substantial, long-term value," said Luke Kissam, Albemarle CEO. "In the short term, we have made the prudent decision to idle mine activity until market conditions improve, but we are well positioned for future growth given the high-quality Wodgina resource and the combined operating expertise of both companies."

The transaction was funded by borrowing of approximately $900 million under an unsecured credit facility.

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