Billionaire mining magnate Gina Rinehart has dropped another $132 million to bolster her stake in lithium miner Liontown Resources, wrangling more power ahead of US giant Albemarle’s planned $6.6 billion takeover.
On Monday, Rinehart’s company Hancock Prospecting confirmed its Liontown stake had ballooned by more than 44 million shares to 10.69 per cent.
Gina Rinehart revealed she had increased her Liontown shareholding on Monday.Credit: Trevor Collens
The news came just a fortnight after the iron ore miner revealed it had spent half a billion dollars acquiring a critical 7.72 per cent stake in the lithium prospector.
Liontown’s shares have continued to hover around the $3 mark in recent weeks, giving the company a market capitalisation of $6.62 billion.
Hancock Prospecting said its strategic stake had been acquired at an average rate well below that level amid tumbling lithium prices, a move in line with its “long-term approach” to investments.
Rinehart’s decision to snap up more shares in Liontown comes as Albemarle continues its due diligence ahead of a vote on its takeover offer, which includes running the ruler over its lucrative early-stage lithium project in the Goldfields.
Liontown has already inked supply deals with the likes of Ford and Tesla for Kathleen Valley, a hard-rock lithium deposit hailed among the most promising in the country.
But Hancock Prospecting spotlighted the risks attached to the project in a notice to the ASX before touting its own credentials delivering projects on time and under budget, including its $10 billion Roy Hill iron ore mine.
“Hancock can provide Liontown with the opportunity to manage its project execution and operational ramp-up risks where it is of value – and particularly in light of the inflationary market pressures that are creating challenges for project delivery across Australia,” the company said.
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“Liontown’s indicated production rate of 3mtpa (increasing to 4mtpa) at its Kathleen Valley project is significant for an underground operation and carries commensurate production and operating cost risks, with its target recovery rate (modelled at 78 per cent) also exceeding the recoveries achieved by most existing and planned lithium producers in West Australia.”
Earlier this month, Liontown’s board voiced its intention to unanimously recommend shareholders vote in favour of the takeover, provided it did not receive a superior proposal.
The September bid was the third levelled by the New York chemicals giant and comes as the battle among electric vehicle manufacturers to secure the raw material intensifies.
The lithium company’s chair Tim Goyder remains its largest shareholder, retaining a 15 per cent stake, while another 20 per cent is reportedly held by investors closely aligned to him.
