Lithium miner's dual listing aims for $247m

MELBOURNE - Talison Lithium, producer of almost a quarter of the world's lithium, is seeking to raise as much as A$196 million ($247 million) in an initial public offering in Canada and Australia to pay debt.

Talison, which mines lithium in Western Australia, is seeking to sell 35 million new shares at a range of between A$4.10 and A$5.10 each as part of a proposed dual listing in Toronto and Sydney, the company said yesterday.

Resource Capital Funds IV LP may sell as much as 3.5 million of its shares in Talison, it added.

Demand for batteries is expected to increase as consumers in developing markets such as China and India buy more mobile devices, including personal computers and cellular phones.

Worldwide demand for hybrid and electric cars may drive up sales of energy cells for the vehicles by more than 200 times over six years to 2.3 trillion in the year ending March 2014, according to Tokyo-based market researcher Fuji Keizai.

"The company is well positioned to respond to an increase in market demand for lithium," Talison chairman Peter Robinson said.

The company estimates lithium demand may increase 6 per cent annually through 2013 with the biggest growth forecast to come from demand for the mass production of electric vehicles incorporating lithium-ion batteries, it said.

Lithium is used in batteries, pharmaceuticals, greases and aluminum smelting, and Talison supplied 23 per cent of global output in 2008, it said.

Talison's Greenbushes lithium operations were bought from Sons of Gwalia in August 2007 by a group of private equity firms led by Resource Capital.

Sons of Gwalia, once Australia's second-biggest gold producer and the world's biggest tantalum miner, appointed outside managers in August 2004 after a review found gold reserves were less than estimated.

Resource Capital Funds paid A$205 million for Sons of Gwalia's Greenbushes and Wodgina assets, the Australian newspaper reported in 2007.

Existing shareholders will retain between 54.7 per cent and 58.8 per cent of the company at the completion of the IPO with Resource Capital Fund the largest holder with between 29.3 per cent and 33.4 per cent.

Rothschild Australia is advising Talison and Macquarie Group in managing the sale in Australia, Talison said.

The company will soon start marketing the offer to Australian and Asian institutional investors.

The Canadian IPO will be underwritten by a group led by Cornmark Securities and including Macquarie Capital Markets Canada, BMO Capital Markets, CIBC World Markets, Paradigm Capital and Raymond James.

- BLOOMBERG