{"text":[[{"start":13.68,"text":"China’s rapid buildout of electric vehicle battery capacity could itself run out of energy. "},{"start":18.859,"text":"Capacity will be twice this year’s demand, according to commodity research group CRU. "},{"start":24.076999999999998,"text":"That finding suggests demand for lithium will be more muted than anticipated by bulls. "},{"start":28.794,"text":"These include US chemicals group Albemarle. "}],[{"start":32.480000000000004,"text":"The world’s leading lithium producer is closing in on an all-cash deal for Australia’s Liontown Resources. "},{"start":38.347,"text":"This is worth A$3 per share or A$6.6bn ($4.3bn) in total. "},{"start":45.802,"text":"Despite weak spot lithium prices, down 61 per cent this year, Albemarle still had to pay up. "},{"start":51.882000000000005,"text":"Its previous offer in March was A$2.50. "}],[{"start":56.78,"text":"Liontown will now open its books. "},{"start":59.259,"text":"Albemarle wants Kathleen Valley, the fifth largest hard rock lithium resource in Australia with 5.4mn tonnes. "},{"start":66.177,"text":"Australia matters to the US producer. "},{"start":68.632,"text":"It already has large stakes in the first and third largest mines there. "}],[{"start":null,"text":"
"}],[{"start":72.82,"text":"The resource-dependent nation welcomes US lithium investment to balance Chinese interest. "},{"start":77.97399999999999,"text":"In July Australia’s Treasury blocked a takeover by a China-linked shareholder of Alita, a lithium miner in administration. "}],[{"start":85.66,"text":"Albemarle’s shares have done little for two years. "},{"start":88.639,"text":"Trailing one-year ebitda for its lithium division, which makes 88 per cent of group profits, has decelerated. "},{"start":95.594,"text":"Profit margins have slipped in recent quarters. "}],[{"start":99.17999999999999,"text":"This deal would be its second largest lithium mining deal announced to date, according to Dealogic data. "},{"start":104.89699999999999,"text":"But it would not add to cash flow before 2025. "},{"start":108.10199999999999,"text":"That puts the offer price at 16 times consensus ebitda for that year. "},{"start":112.89399999999999,"text":"Larger local rival Pilbara Resources, which is already profitable, trades at a third of that valuation. "}],[{"start":119.85,"text":"Liontown’s shareholders should be pleased. "},{"start":122.61699999999999,"text":"Its own valuation back in late 2021 — when spot lithium prices were similar — put a A$4.2bn value on Kathleen Valley. "},{"start":131.522,"text":"Albemarle’s downstream lithium conversion plants are some 1,000km away by rail near Perth. "},{"start":137.227,"text":"A long Australian rail link is preferable to long-distance road links in developing countries such as Mali, as Liberum points out. "}],[{"start":145.07999999999998,"text":"Albemarle has plenty of form in Australia. "},{"start":147.897,"text":"But given battery overcapacity in China, the chances of its stock price benefiting from this added production are slim. "}],[{"start":154.30999999999997,"text":""}]],"url":"https://creatives.ftacademy.cn/album/121031-1693881384.mp3"}