SYDNEY – A mining company controlled by billionaire Gina Rinehart, Australia’s richest woman, has acquired a nearly 20% stake in Liontown Resources. This development may complicate Albemarle’s proposed takeover of the local lithium miner.
Hancock Prospecting, led by Gina Rinehart, announced on Wednesday that it had purchased a 19.9% equity stake in Liontown, whose shares are traded on the Australian Securities Exchange. Reaching this stake was a strategic objective for Hancock.
As the largest shareholder, Hancock looks forward to exerting a significant influence on Liontown’s future. Albemarle recently made a revised proposal valuing Liontown at over $4 billion. Their offer of AU$3.0 in cash per share is considered their best and final offer after previous attempts were rejected as too low.
Liontown granted Albemarle exclusive access to its books on September 11, expecting the due diligence process to take around four weeks. Meanwhile, Hancock revealed that it paid no more than AU$3 per share for the stake. Liontown shares closed at AU$2.92 on Wednesday.
If this acquisition is successful at its valuation, it will be one of the largest lithium deals ever. It demonstrates how the energy transition is transforming the fortunes of the industry that supplies a key metal used in batteries.
Growth of the Lithium Industry
The acquisition comes in the wake of other significant moves within the lithium industry. This year, Philadelphia-based Livent agreed to merge with Australia’s Allkem, creating an estimated $11 billion lithium player. Additionally, Exxon Mobil has secured rights to a portion of lithium acreage in Arkansas.
The global lithium market witnessed exponential growth, with sales reaching approximately $48 billion last year compared to just $1.6 billion in 2015, according to Benchmark Mineral Intelligence.
