Allkem, Livent merge to create world's third largest lithium miner

US-based Livent and Australia-based Allkem are combining in a $10.6 billion all-stock deal that will create the world's third-largest producer of lithium, a metal pivotal to making electric vehicle batteries.

The combined entity would trail only US-based Albemarle Corp and Chile's SQM in lithium output, but will face competition from China's Ganfeng Lithium Group and Tianqi Lithium Corp as well.

Executives hope the Allkem-Livent merger will create an industry powerhouse on four continents that will better supply carmakers such as Tesla, General Motors and BMW.

Global demand for lithium batteries could surge more than five-fold by 2030 as more car buyers shift to EVs and people install energy storage systems, the public-private alliance Li-Bridge estimated earlier this year.

In the US alone, demand for lithium batteries will grow more than six times into a $55 billion annual market by 2030, but the country will still have to depend on imports for supply, the alliance said.

"To develop more lithium projects, you need to be big enough to finance, you need access to resources and you need technical expertise," Livent CEO Paul Graves told Reuters. "Combining the two companies helps us with all of those areas."

Allkem and Livent both operate lithium brine facilities in Argentina that are roughly 10 km apart. In Canadia's Quebec province, the companies are both building hard rock lithium mines less than 100 km away from each other. Combining both companies should help those projects develop faster, Graves said.

Allkem is also an expert in the nascent field of direct lithium extraction (DLE), increasingly seen as a tantalizing prospect to produce more of the battery metal faster than traditional mining methods.