(Change date, add timeline, add contractor’s comments)
MELBOURNE March 11 (Reuters) – An Australian mining services contractor locked in a legal dispute with China’s Tianqi Lithium Corp over a failed payment has asked the Foreign Investment Review Agency to examine the related sale, a company director said on Thursday.
Perth-based MSP Engineering has asked the FIRB to review part of the sale of Tianqi’s Australian lithium business to nickel miner IGO after Tianqi refused to pay him to build a battery-grade lithium processing plant in Western Australia.
This week, the Western Australian Supreme Court ruled that Tianqi, one of the world’s largest producers of the lithium chemical used in electric vehicle batteries, must pay A $ 38.9 million ($ 30 million) in arrears. Tianqi said he would appeal.
The FIRB application comes at a time when trade tensions between China and Australia are rising.
“If we are not completed as part of that sale, then we don’t think it represents the right behavior by foreign investors,” director Craig Burton told Reuters.
MSP has had to stop other lines of business from paying its contractors and subcontractors for months of work and has reduced its staff to four out of 400 employees pending payment, he said.
“This has a bad impact on our business. We just want Tianqi to do the right thing and pay the money spent on the project. “
Tianqi said in a filing on Wednesday that it would challenge the verdict that has given up to March 15 to pay money, including principal and interest. His counter claims included that the project was over budget.
The FIRB did not have any comments yet. The IGO declined to comment.
Tianqi’s assets include a 51% stake in the Greenbushes lithium mine and a 100% stake in the Kwinana lithium plant.
The facility was heralded as the largest of its kind before the first phase commissioning of 24,000 tonnes was halted a year ago as Tianqi flagged liquidity problems due to plunging lithium prices.
The debt-laden company in December secured a strategic investor in the form of Australian nickel miner IGO Ltd for 49% of its business, paving the way for a $ 3 billion loan extension.
Tianqi warned that filing the verdict could adversely affect the liquidity and factory of Kwinana.
The facility is likely to start operating in the fourth quarter of 2021, Daiwa Capital Markets said in a January note, citing Tianqi management at a conference.
Tianqi did not immediately respond to a request for comment about the intended launch date.
$ 1 = 1.2932 Australian dollars Report by Tom Daly and Melanie Burton at MELBOURNE; Edited by Mark Potter and Stephen Coates