Today's merger between Talison Minerals Pty Ltd and Salares Lithium Inc. was greeted with a bout of surprise. But while the immediate short term challenges seem significant, longer term the move makes sense.
The biggest surprise has been Talison’s decision to enter the brine industry – this is a significantly different business from mining and refining spodumene. Talison doesn’t sell lithium chemicals – such as lithium carbonate and hydroxide – but rather the feedstock concentrates to chemical companies.
Just ask Chemetall GmbH and SQM SA why they don’t own mines* – the two leading carbonate producers are chemical not mining companies. (*This is mines in the traditional sense. The facilities in the Atacama are esentially a plumbing system of pumps and wells).
The titanium industry is an apt comparison: in a mature and established industry, only two chemical makers (titanium dioxide producers) own...