Gina Rinehart, an Australian billionaire, has increased her stake in Liontown Resources, a lithium developer, in a bold move to have a larger say in the company’s future as it awaits a takeover offer from Albemarle. Rinehart’s company, Hancock Prospecting, now holds a 14.67% stake in Liontown, positioning it strategically for negotiations with Albemarle, the world’s largest lithium producer. Albemarle’s proposed takeover requires support from 75% of votes cast.
Rinehart has been steadily increasing her holdings in Liontown since early September when Albemarle was granted access to Liontown’s books after revising its takeover proposal. The move suggests that Rinehart aims to gain greater exposure to the lithium market. Liontown’s Kathleen Valley lithium project in Western Australia is considered one of the most promising lithium deposits globally, and the company has already secured a deal to supply Ford with battery raw materials.
Hancock Prospecting has expressed concerns about Liontown’s ability to bring the Kathleen Valley project online within the estimated cost and time frame. As a result, Hancock has offered its services and indicated a potential interest in securing a position on Liontown’s board. Hancock declined to comment further on the matter.
This development comes amidst a surge of interest in Australian lithium assets due to the global transition towards clean energy. Both Liontown and Albemarle have refrained from commenting on Hancock’s increased stake.
Hancock revealed that it paid up to A$3 per share for its stake in Liontown, while Albemarle has tentatively offered A$3 per share for the company, valuing it at $4.3 billion. Despite the ongoing negotiations and uncertainties, Liontown’s shares rose by 0.5% to A$2.965 on Wednesday, marking an increase of approximately 120% this year.
Last week, Liontown announced a 6% increase in the estimated capital cost for its Kathleen Valley lithium project, amounting to A$951 million ($611 million). However, the company reconfirmed its commitment to meeting its production target of starting operations in mid-2024.
As the situation unfolds, industry observers are eagerly anticipating the outcome of the negotiations between Liontown Resources, Albemarle, and Gina Rinehart’s Hancock Prospecting. The Australian lithium market remains a crucial player in the clean energy transition, attracting significant attention from investors and stakeholders worldwide.
