Vast operations: A truck sprays water onto a mine pit at Hancock Prospecting Pty’s operations in the Pilbara region. Rinehart has amassed a net worth of US$18.7bil thanks to massive iron ore mines in Western Australia. — Bloomberg
SYDNEY: Australia’s richest woman has added to her stake in lithium miner Liontown Resources Ltd for the fourth time in under a month, edging closer to a position that could block a A$6.6bil takeover by the world’s biggest producer of the metal.
Gina Rinehart’s Hancock Prospecting Pty now owns 14.67% of Liontown, the target of the Albemarle Corp bid, according to an ASX filing – a stone’s throw from the 15% level that is generally considered to be an effective blocking minority stake.
Her holding stood at just under 8% on Sept 12.
Rinehart, who has amassed a net worth of US$18.7bil thanks to massive iron ore mines in Western Australia, does have existing lithium investments – but Liontown is by far her most significant bet on the battery metal to date.
Privately-held Hancock described the stake as “strategic,” but the ultimate intention is unclear. Under Australian law, edging over 20% would normally trigger a mandatory offer.
“Hancock maintains a long-term approach to its investments and commodity markets,” it said in a Sept 25 statement.
“In line with that long-term approach, Hancock can provide Liontown with the opportunity to manage its project execution and operations ramp-up risks.”
The company declined to comment further yesterday.
“I would say she’s got to be pretty serious,” said Max Vickerson, an analyst at Morgans Financials Ltd. “She must have been willing to stump up a fair amount of capital to build up that position.
“Even if the deal went through, if she’s got that big a chunk of the company, maybe she gets a board seat.”
United States lithium giant Albemarle, meanwhile, has been circling Liontown for months, hoping to expand its scale in Australia, and was finally granted due diligence in early September after raising its cash offer by 20% to A$3 per share.
That level is more than double Liontown’s stock at the start of the year, and which Hancock says it has not exceeded in its purchases.
Perth-based Liontown owns Kathleen Valley, one of the most promising early-stage lithium projects in Australia. It has supply agreements with major automakers including Tesla Inc and Ford Motor Co.
Hancock has criticised the management of Kathleen Valley, saying it faced “significant execution, operational ramp-up and market risks,” in a Sept 29 statement reporting the firm had increased its stake to 12.4%.
Demand for lithium has surged in recent years as carmakers, driven by climate policies, attempt to reinvent themselves as electric vehicle manufacturers.
Australia’s government has ambitions to help break China’s stranglehold on the battery supply chain – a priority for the United States and other western governments.
While Australia produces more than half of the world’s lithium, it ships almost all of it to China in the form of bulky, low-grade ore, where it is refined into a delicate, battery grade chemical. — Bloomberg
