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China's Tianqi Lithium to appeal after court orders it to pay Australian contractor

March 10 (Reuters) - China’s Tianqi Lithium Corp said on Wednesday it would appeal against a court ruling ordering it to pay A$38.9 million ($30 million) in arrears to the main contractor on its stalled lithium processing plant in Australia.

Tianqi, one of the world’s biggest producers of lithium chemicals used in electric vehicle batteries, said in an exchange filing the Supreme Court of Western Australia had given it until March 15 to pay Perth-based MSP Engineering the money, which includes a principal amount and interest.

MSP was appointed lead contractor on the Kwinana processing plant, designed to make battery-grade lithium hydroxide.

The facility was heralded as the largest of its kind before commissioning of its 24,000 tonnes per year first phase was halted a year ago as Tianqi flagged liquidity problems due to plunging lithium prices.

The company has since been locked in a legal dispute with MSP over moneys owed. The Australian Financial Review reported on Wednesday that MSP had shrunk to a staff of four from 400 employees and subcontractors previously as it awaited payment.

MSP did not immediately respond to a request for comment outside normal business hours.

Debt-laden Tianqi in December secured a strategic investor in its Kwinana plant and Greenbushes lithium mine in the shape of IGO Ltd, paving the way for an extension on $3 billion of loans, while resurgent lithium prices are also giving the company a financial boost.

But Tianqi warned in the filing the ruling could have an adverse affect on liquidity and the Kwinana plant.

The facility will likely commence operations by the fourth quarter of 2021, Daiwa Capital Markets said in a January note, citing Tianqi management remarks at a conference.

Tianqi did not immediately respond to a request for comment on the intended launch date.

$1 = 1.2932 Australian dollars Reporting by Tom Daly. Editing by Mark Potter

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