The IGO Ltd (ASX: IGO) share price is back on form and charging higher on Tuesday.
At the time of writing, the clean energy focused mining company’s shares are up 9% to $7.75.
Why is the IGO share price on the rise?
Investors have been buying the company’s shares on Tuesday after it provided an update on its lithium transaction.
According to the release, key regulatory requirements for the internal restructure of the Australian arm of Tianqi Lithium Corporation to proceed have now been satisfied. The internal restructure is one of the conditions precedent to the transaction to form a new lithium joint venture with Tianqii.
The company notes that this follows Australian foreign investment approval and notice from the Australian Taxation Office (ATO) confirming the tax migration of the joint venture entity to Australia.
And while the ATO engagement process is ongoing, in order to expedite completion of the transaction, the two parties have now agreed to proceed to completion. This is on the basis that if there were an unforeseen tax outcome resulting from the internal restructure, IGO would share the tax liability with Tianqi in proportion to its joint venture interest of 49%.
The two companies are now working hard to complete the transaction on or before 30 June 2021, once the remaining steps required to complete the internal restructure are completed.
IGO’s Managing Director and CEO, Peter Bradford, commented: “We are delighted to have reached this important milestone and we look forward to formally commencing our joint venture with Tianqi in the coming weeks.”
“As a priority, the joint venture will initially be focused on the commissioning of Train 1 at the Kwinana Lithium Hydroxide Refinery, as well as working with our partner, Albemarle, on the expansion opportunities at the world class Greenbushes Lithium Mine. Demand for high quality spodumene and lithium hydroxide has increased significantly over recent months, promising strong returns to our shareholders as this trend, driven by global decarbonisation and electric vehicle demand, continues into the future.”
The IGO share price is now up 58% over the last 12 months.