Tianqi Lithium Energy Australia (TLEA), a joint venture between Tianqi Lithium (HKG: 9696) and IGO Ltd (ASX: IGO), has made a A$136 million ($126 million) bid to acquire lithium explorer Essential Metals (ASX: ESS) as part of the partners' plan to expand their footprint into Western Australia.
TLEA, which is 51% owned by China's Tianqi Lithium and 49% by Australian miner IGO Ltd, set the bid at 50 Australian cents per share.
The sum represents a 36.3% premium to Essential's 30-day volume weighted average share price, the bidders said.
The joint venture already has a 51% stake in Greenbushes, the world's largest hard rock lithium mine located in the southwest of Western Australia, and 100% of the Kwinana lithium refinery, just south of Perth.
The acquisition of Essential Metals, which has been backed by the junior's board, will add early-stage project Pioneer Dome to the venture's asset portfolio. The project is located in the southern region of Western Australia.
Pioneer, which is years from development, includes the Dome North mineral resource of 11.2-million tonnes at 1.16% lithium oxide.
Essential Metals also holds the Juglah Dome and the Golden Ridge gold projects, both within Western Australia, as well as a JV interest in a number of gold and nickel projects in the region.
The transaction requires the approval of Australia's Foreign Investment Review Board, with Treasurer Jim Chalmers having the ultimate say.
A major supplier of minerals key to the energy transition such as rare earths and lithium, Australian authorities recently said they planned to become "more assertive" in deciding who is allowed to invest in the country's growing critical minerals industry.
Essential shares jumped in Monday trading in Sydney, from 34 ? when markets closed on Friday to A48 ? local time on Monday. Its shares have traded in a 52-week window of A21 ? and A73 ?, valuing the company at A$92 million.