TIANQI LOOKS AT OF­FLOAD­ING EQ­UITY, AS­SETS

The Australian Mining Review - - NEWS - RAY CHAN

Tianqi Lithium Corp, one of the world’s top lithium pro­duc­ers, has in­di­cated it was ex­plor­ing sell­ing eq­uity and as­sets, as well as bring­ing in strate­gic in­vestors to ad­dress liq­uid­ity prob­lems.

The Chi­nese com­pany, which is set to post heavy losses in both 2019 and the first quar­ter of 2020 amid low lithium prices, made the com­ments in a fil­ing to the Shen­zhen Stock Ex­change af­ter re­ports it was look­ing to sell a stake in its Aus­tralian joint ven­ture, Tal­i­son Lithium, to cut debt. In early April, the com­pany an­nounced that it ex­pected to re­port a net loss of 450510m yuan ($64-72m) in the first quar­ter of 2020, com­pared with a net profit of 111.29m yuan in the cor­re­spond­ing pe­riod of 2019.

Chengdu-based Tianqi has been strug­gling to re­pay loans taken out to fi­nance its high-pro­file $4.1b ac­qui­si­tion of nearly quar­ter of Chilean miner SQM - agreed in 2018 when prices for lithium, a key in­gre­di­ent in bat­ter­ies for elec­tric ve­hi­cles, were much higher.

The com­pany said its “liq­uid­ity pres­sure in­creased” in the fourth quar­ter of 2019 due to fall­ing lithium prices, which are cur­rently around two-thirds lower than they were two years ago, as well as ris­ing fi­nan­cial ex­penses.

To ad­dress this, Tianqi is look­ing at the fea­si­bil­ity of var­i­ous fi­nanc­ing tools, in­clud­ing “the in­tro­duc­tion of do­mes­tic and for­eign strate­gic in­vestors (and) the sale of as­sets and eq­uity,” the fil­ing said, with­out spec­i­fy­ing what the com­pany was pre­pared to di­vest.

Tal­i­son Lithium - in which Tianqi part­ners US-based Albe­marle Corp - op­er­ates the Green­bushes lithium mine in WA, as well as the Kwinana pro­cess­ing plant which is sup­posed to pro­duce bat­tery-grade lithium hy­drox­ide but has had its com­mis­sion­ing post­poned.

Tianqi said it had not yet signed any legally bind­ing agree­ment to sell as­sets or bring in a strate­gic in­vestor.

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