Contractor asks Australia to review asset sale to China's Tianqi Lithium (updated)

MSP Steel & Power

11/03/2021 07:02

(Changes date, adds dateline, adds contractor comments)
    MELBOURNE March 11 (Reuters) - An Australian mining services
contractor locked in a legal dispute with China's Tianqi Lithium
Corp  002466.SZ  over failed payments has asked the Foreign
Investment Review Board to examine a related sale, a company
director said on Thursday.
    Perth-based MSP Engineering has asked FIRB to review a part
sale of Tianqi's Australian lithium business to nickel miner IGO
 IGO.AX  after Tianqi refused to pay it for constructing a
battery-grade lithium processing plant in Western Australia. 
    This week, Western Australia's Supreme Court ruled that 
Tianqi, one of the world's biggest producers of lithium
chemicals used in electric vehicle batteries, must pay A$38.9
million ($30 million) in arrears. Tianqi said it will appeal.
    The FIRB submission comes at a time of heightened trade
tension between China and Australia.    
    "If we are not resolved as part of that sale, then we think
that doesn’t represent appropriate conduct by a foreign
investor," director Craig Burton told Reuters.   
    MSP has had to wind down other business lines to pay its
contractors and subcontractors for months of work and has shrunk
its staff to four from 400 employees as it awaits payment, he
said.     
    "It's had a devastating affect on our business. We just want
Tianqi to do the right thing and pay the money that was spent
doing the project." 
    Tianqi said in a filing on Wednesday it would contest the
ruling which had given it until March 15 to pay the money,
including principal and interest. Its counter claims include
that the project ran over budget.  
    FIRB had no immediate comment. IGO declined to comment.     
 
    Tianqi's assets include a 51% stake in the Greenbushes
lithium mine and 100% of the Kwinana lithium plant.
    The facility was heralded as the largest of its kind before
commissioning of its 24,000 tonnes per year first phase was
halted a year ago as Tianqi flagged liquidity problems due to
plunging lithium prices.  urn:newsml:reuters.com:*:nL4N2BF0DE
    The debt-laden company in December secured a strategic
investor in the shape of Australian nickel miner IGO Ltd
 IGO.AX  for 49% of its businesses, paving the way for a
lifeline extension on $3 billion of loans.  urn:newsml:reuters.com:*:nL4N2IO4GE
    Tianqi warned in the filing the ruling could have an adverse
affect on liquidity and the Kwinana plant.
    The facility will likely commence operations by the fourth
quarter of 2021, Daiwa Capital Markets said in a January note,
citing Tianqi management remarks at a conference.
    Tianqi did not immediately respond to a request for comment
on the intended launch date.
    ($1 = 1.2932 Australian dollars)

 (Reporting by Tom Daly and Melanie Burton in MELBOURNE; Editing
by Mark Potter and Stephen Coates)
 ((tom.daly@thomsonreuters.com; +86 10 5669 2119;))