Financial Diary – Santiago
Codelco reached an agreement to acquire 100% of the Australian mining company Lithium Power International (LPI) for US$244 million. The company owns Minera Salar Blanco in Chile, which has lithium extraction projects in the Salar de Maricunga. The state copper company, which also has an interest in said basin, said that it will combine the LPI project with its own development “to make a world-class lithium initiative viable.”
The operation could be completed within the first quarter of 2024, Codelco reported. The corporation will finance the purchase with its own resources. “This is a strategic acquisition for the creation of value for Codelco and for Chile, thus positioning us as a key player in times of energy transition,” said Máximo Pacheco, president of the board of directors of Codelco.
The agreement represents the first lithium acquisition by Codelco, which was authorized by its board of directors in accordance with the National Lithium Strategy, as announced on April 20, 2023.
“The acquisition of LPI is a logical consolidation within the lithium panorama of the Salar de Maricunga and “It positions us even further in our strategy to become a supplier of critical metals of global relevance to enable the energy transition and comply with the National Lithium Strategy,” Pacheco stated.
He added that “The acquisition will make the Blanco Project viable through synergies with the assets and permits that Codelco has in the Maricunga Salar and, in this way, develop a globally outstanding lithium project, with exceptional sustainability credentials. The expectation is that it will generate value both for Codelco and for our country and the region, especially for the neighboring communities.”
The copper company will take advantage of its mining experience and financial strength to maximize the value of the project and reduce its risks in the development stage, considering advantages such as the knowledge and proximity it has with the Atacama Region, where its Salvador Division operates, he noted.
LPI’s shareholder meeting is expected to vote on the transaction in late January 2024, and if approved by shareholders and the Australian Court of Justice, the transaction will be implemented immediately after.
Codelco was supported by Rothschild in financial matters, Allens as legal advisor in Australia, Carey in legal matters in Chile, and Deloitte as tax and accounting advisor. LPI had Canaccord Genuity (Australia) Limited as financial advisor, Ashurst as legal advisor in the oceanic country and PPU Legal in Chile.