Acquisitions

12 Months Ended

Dec. 31, 2021

Business Combinations [Abstract]

Acquisitions

Acquisitions:

Guangxi Tianyuan New Energy Materials Acquisition

On September 30, 2021, the Company signed a definitive agreement to acquire all of the outstanding equity of Guangxi Tianyuan New Energy Materials Co., Ltd. (“Tianyuan”), for approximately $200 million in cash. Tianyuan's operations include a recently constructed lithium processing plant strategically positioned near the Port of Qinzhou in Guangxi. The plant has designed annual conversion capacity of up to 25,000 metric tons of lithium carbonate equivalent (“LCE”) and is capable of producing battery-grade lithium carbonate and lithium hydroxide. The plant is currently in the commissioning stage and is expected to begin commercial production in the first half of 2022. The Company expects the transaction, which is subject to customary closing conditions, to close in the first half of 2022.

Wodgina Acquisition

On October 31, 2019, we completed the previously announced acquisition of a 60% interest in MRL’s Wodgina Project for a total purchase price of approximately $1.3 billion. The purchase price is comprised of $820 million in cash and the transfer of 40% interest in certain lithium hydroxide conversion assets being built by Albemarle in Kemerton, Western Australia, originally valued at $480 million. The cash consideration was initially funded by the 2019 Credit Facility entered into

on August 14, 2019; see Note 14, “Long-Term Debt,” for further details. During the fourth quarter of 2021, the Company revised its estimate of the obligation to construct these lithium hydroxide conversion assets due to anticipated cost overruns from supply chain, labor and COVID-19 pandemic related issues. Consequently, a $132.4 million expense is included in Gain on sale of business/interest in properties, net, within operating income for the year ended December 31, 2021, with a corresponding obligation recorded in Accrued liabilities.

During the year ended December 31, 2020, we paid $22.6 million of agreed upon purchase price adjustments. The stamp duty levied on the assets purchased of $61.5 million, originally recorded as an expense based on an estimated calculation during the year ended December 31, 2019, was paid during the year ended December 31, 2020 and is included in Change in working capital on the consolidated statement of cash flows.

In addition, we have formed an unincorporated joint venture with MRL, MARBL, for the exploration, development, mining, processing and production of lithium and other minerals from the Wodgina Project and for the operation of the Kemerton assets. We are entitled to a pro rata portion of 60% of all minerals (other than iron ore and tantalum) recovered from the tenements and produced by the joint venture. The joint venture is unincorporated with each investor holding an undivided interest in each asset and proportionately liable for each liability; therefore our proportionate share of assets, liabilities, revenue and expenses are included in the appropriate classifications in the consolidated financial statements. As part of this acquisition, MARBL Lithium Operations Pty. Ltd. (the “Manager”), an incorporated joint venture, has been formed to manage the Wodgina Project. We will consolidate our 60% ownership interest in the Manager in our consolidated financial statements.

This acquisition provides access to a high-quality hard rock lithium source, further diversifying our global lithium resource base, and strengthens our position by increasing capacity to support future market demand. Since its acquisition in 2019, the Wodgina mine idled production of spodumene until the market demand supported bringing the mine back into production. MARBL recently announced its intention to resume spodumene concentrate production at this site, with the production restart expected during the second quarter of 2022.

The results of our 60% ownership interest in MARBL are reported within the Lithium segment. Included in Net income attributable to Albemarle Corporation for the years ended December 31, 2021 and 2020 and the period November 1 through December 31, 2019 were losses of approximately $32.8 million, $20.1 million and $73.0 million, respectively, attributable to the joint venture. Included in the loss recorded in 2019 was an estimated loss of $64.8 million related to the stamp duties levied on the assets purchased. The adjustment to the final amount of stamp duties levied was recorded, and the full amount was paid, during the year ended December 31, 2020 as noted above. There were no net sales attributable to the joint venture during these periods. Pro forma financial information of the combined entities for periods prior to the acquisition is not presented due to the immaterial impact of the Net Sales and Net Income of the Wodgina Project on our consolidated statements of income.

Acquisition and integration related costs

Acquisition and integration related costs for the years ended December 31, 2021, 2020 and 2019 of $12.7 million, $17.3 million and $20.7 million were included primarily in Selling, general and administrative expenses, respectively, on our consolidated statements of income. These include costs for the Tianyuan and Wodgina acquisitions noted above, as well as various other completed or potential acquisitions and divestitures.