Tuesday, May 16, 2023 10:16:59 AM
(Adds Toyota Tsusho comments in paragraph 14-15)
By Melanie Burton
MELBOURNE, May 11 (Reuters) - Shares in Australian-listed lithium miners jumped on Thursday after a $10.6 billion merger in the sector raised expectations for more consolidation among producers of the key metal in electric vehicle batteries.
The tie up between Allkem Ltd and Livent announced on Wednesday will create the world's third-biggest producer of lithium for which demand is expected to soar more than five-fold by 2030 amid the energy transition.
Consolidating disparate lithium producers may lead to smoother supply chains for carmakers such as Tesla Inc. , General Motors and BMW that are increasingly hungry to secure supplies.
Allkem shares rallied as much as 18.6%, while Livent gained 5.2% in New York overnight, leading a strong sector advance that saw Australia’s biggest independent lithium producer Pilbara Minerals rise as much as 8%.
Developer Lake Resources, which specialises in the same type of lithium extraction technology in Argentina as Livent, rallied 13%. Others including Liontown, Core Lithium and Sayona Mining were up between 2%-5% after rallying earlier.
Miners flush with cash after last year's surge in commodity prices have been driving deals in Australia's resources sector. Lithium producers in particular have been printing money over the past two years as prices rose six-fold before falling sharply earlier in 2023.
"We saw the lithium price remain not far from record highs for some time which means producers are reasonably cashed up," said David Lennox of private wealth manager Fat Prophets, which holds Allkem shares.
"There will probably be a few more takeovers in the sector. Given the demand expectations, everyone wants to get on board."
Greenlite Ventures Completes Agreement with No Limit Technology • GRNL • Jul 19, 2024 10:00 AM
VAYK Expects Revenue from First Airbnb Property Starting from August • VAYK • Jul 18, 2024 9:00 AM
North Bay Resources Acquires Mt. Vernon Gold Mine, Sierra County, California, with Assays up to 4.8 oz. Au per Ton • NBRI • Jul 18, 2024 9:00 AM
Nightfood Holdings Signs Letter of Intent for All-Stock Acquisition of CarryOutSupplies.com • NGTF • Jul 17, 2024 1:00 PM
Kona Gold Beverages Reaches Out to Largest Debt Holder for Debt Purchase Negotiation • KGKG • Jul 17, 2024 9:00 AM
Avant Technologies Welcomes Back Former CEO with Eye Toward Future Growth and Expansion • AVAI • Jul 17, 2024 8:00 AM