Tianqi Lithium exec sees more sector mergers and acquisitions

HONG KONG (Reuters) - Tianqi Lithium, one of the world's biggest lithium producers, expects more consolidation in the lithium industry, an executive at the group said on Tuesday, following a $10.6 billion merger announced last week between Allkem Ltd and Livent Corp.

The Allkem Ltd and Livent tie-up has raised expectations for more mergers and acquisitions among producers of the key metal in electric vehicle batteries, for which demand is expected to soar more than five-fold by 2030 amid the energy transition.

Global companies in recent years have been scrambling to secure lithium ore amid surging demand from the electric vehicle battery industry, lithium's main consumer, which boosted lithium prices over 10 times from late 2020 to late 2022.

"At least in the past three years, it's all about our anxiety to develop material. If we cannot decrease our anxiety, this trend will continue," Yasmin Liu, the executive vice president and chief integration Officer at Tianqi Lithium said at a seminar held by the London Metal Exchange in Hong Kong.

Lithium carbonate processing capacity expanded strongly, especially in China, while lithium ore supply growth has been limited.

Mergers and acquisitions in the lithium value chain have allowed companies to save capital spending and speed up project developments, Susan Zou, an analyst at Rystad Energy said in a report last week.

This is especially crucial for lithium producers when prices are falling and lithium supply is still at risk of a deficit in the long-run, Zou said.

Spot lithium carbonate prices assessed by Fastmarkets plunged to an 18-month low of 165,000 yuan ($23,871.18) a tonne on April 20, wiping out 72.4% from a record high of nearly 600,000 yuan a tonne in November.

Prices rebounded from the April low to 245,000 last week as buyers, whose stockpiles of lithium carbonate have been low, scooped up cheaper material.

(This story has been corrected to fix the spelling of the company to Allkem, not Alldkem, in paragraphs 1 and 2)

($1 = 6.9121 yuan)

(Reporting by Siyi Liu and Mai Nguyen in Hongkong; Editing by Emelia Sithole-Matarise)