Gina Rinehart has lifted her stake in Liontown Resources, as Australia’s richest person seeks to muscle in on a proposed takeover of a lithium mine developer by Albemarle, the world’s largest producer of the battery
Australia’s richest person raises stake in lithium producer, threatening $7.1b takeover
While it is clear that Rinehart — nicknamed the “iron lady” for her steely personality and the commodity that formed the bedrock of her fortune — is working to diversify into lithium, she has remained silent on her exact intentions.
Industry analysts have speculated that she might want to elicit a higher price from Albemarle — who said its fourth offer in September was “best and final” — partner with the global lithium leader in a joint venture, team up with somebody else or even go it alone in acquiring Liontown.
Under Australian takeover law, if Rinehart’s stake exceeds 19.9 per cent, she will be obliged to make a rival bid for Liontown, which is developing a large underground lithium deposit in Western Australia.
However, Hancock has a long history of joint ventures on virtually all of the assets that it owns, making some form of partnership the most likely outcome and Albemarle a desirable partner for its expertise in chemical processing.
Hancock said last week that it “remains open to nominating directors to Liontown’s board in the future and particularly if its Strategic Stake continues to increase towards 19.9 per cent,” suggesting that it is unlikely to opt to make a full takeover bid for now.
In Hancock’s first public statement about Liontown in September, it said that the company could contribute to the lithium company’s future direction “alongside other Liontown shareholders, including in relation to potential investment opportunities for downstream value add in Western Australia”.
The other main shareholders in Liontown are chair Tim Goyder and Albemarle, while the remainder of the publicly disclosed shareholders are passive funds that would not be involved in operating a mine.
Albemarle’s period of exclusivity with Liontown, which granted it time to decide whether to turn its non-binding proposal into a finalised offer, is set to come to an end on Wednesday.
The moves by Rinehart come after Chris Ellison, managing director of mining group Mineral Resources and a collaborator with the Australian mining mogul on previous deals, restructured a joint venture with Albemarle.
As part of the revised deal, Ellison is pulling back from investing in Chinese lithium refineries to try to build his own lithium processing plant, ideally in Australia, he said on a company earnings call.
Written by: Harry Dempsey in London
© Financial Times