* Pilbara shares rise 5.6% on news
* Company can tap Altura assets for next growth phase
* Buyout a further sign that market is turning a corner -analyst (Adds industry background, analyst quote)
By Shruti Sonal
Dec 1 (Reuters) - Australia's Pilbara Minerals Ltd PLS.AX said on Tuesday it has agreed to buy the lithium assets of troubled peer Altura Mining Ltd AJM.AX for $175 million, in further sector consolidation that suggests a two-year bear market may be turning around.
Altura entered receivership in October following prolonged weakness in the raw battery materials market that was worsened by the impact of the COVID-19 pandemic this year. Altura's creditors will vote on the proposal on or before Dec. 11.
But in the past month, lithium miners across the globe have been raising funds and scooping up troubled projects on prospects for stronger demand ahead. have taken heart as electric vehicle production in China recovers and as Europe speeds up development of its domestic market. Prices for lithium carbonate have climbed by 17% off June lows, but are still around a quarter of peak levels.
"The buyout gives Pilbara Minerals a growth option for when the market picks up speed over the next two years, without adding to export tonnes now," said Warren Edney, analyst at E.L. & C. Baillieu.
Pilbara will now be able to tap Altura's infrastructure rather than building its own for its next stage of growth, he said. Shares of Pilbara, which were halted on Tuesday pending the offer announcement, rose as much as 5.6% to A$0.75 after trading resumed.
Still, the market remains fragile due to ample global spodumene stocks.
"I don't believe they will restart Altura's operations until the spodumene market turns around", Edney added.
Prices for hard rock lithium, known as spodumene, have stayed mired at lows below $400 per tonne since August.
Pilbara said it has proposed an arrangement under which it will contribute A$6 million ($4.4 million) to a fund to support Altura employees who have been made redundant following the lithium project being placed into care and maintenance. ($1 = 1.3574 Australian dollars)