The Australian lithium landscape has experienced a surge of activity in the latter half of 2024, as miners snap up new stakes and make significant takeover bids.
Gina Rinehart’s Hancock Prospecting has found itself in the centre of some major acquisitions in recent months, seemingly disrupting potential deals in its desire to get its hands on a greater share of the critical mineral.
Hancock Propsecting’s lithium moves began with Liontown and Albemarle in September.
As Albemarle prepared to launch a $6.6 billion takeover of lithium producer Liontown, Hancock, led by executive chairman Gina Rinehart, was quietly increasing its stake in the company, which has two major lithium deposits in WA.
From its initial 7.72 per cent stake in Liontown, Hancock Prospecting worked its way up to becoming the company’s largest shareholder in October, taking a 19.9 per cent share.
Less than a week later, and after considerable speculation in the market about Hancock’s goal in buying the increased stake, Albemarle backed out of the deal to acquire Liontown.
“Our engagement with the Liontown team has been meaningful and productive,” Albemarle chief executive officer Kent Masters said at the time. “We appreciate the level of cooperation we have received, and we thank the entire team for their efforts.”
In its statement announcing the decision, Albemarle noted growing complexities associated with the proposed transaction as a factor in the decision.
The decision came just weeks before Liontown announced that its Kathleen Valley lithium project hit its 50 per cent completion milestone. The project is also fully funded to production and beyond, with debt funding of $760 million secured.
“To the credit of the entire Liontown team, Kathleen Valley remains on schedule with all major mining and construction contracts now awarded and more than 90 percent of capital costs committed, ensuring we have a clear line of sight through to first production in mid-2024,” Liontown managing director Tony Ottaviano said.
It was all quiet on the lithium front for a few weeks, until Chilean lithium miner SQM announced its intention to buy lithium upstart Azure Minerals for $3.52 per share on October 26.
As Azure shareholders were supporting the bid, Hancock Prospecting was acquiring a strategic stake of 18 per cent.
The jewel in the Azure crown is the Andover project in the Pilbara, with nickel-focused exploration at the site discovering significant bodies of nickel, copper and cobalt. Andover also has potential to host significant lithium mineralisation.
Hancock is keeping quiet about its plan for a potential lithium business, only saying that its investment focus is long term.
“Hancock has a history of successful domestic and international partnerships across resources and agriculture, including at Roy Hill, S. Kidman and Co. and multiple earlier stage exploration projects with a range of other partners,” the company said.
“In each case, those businesses have benefited from the collective skills and expertise of the partners.”
Industry experts have been speculating that Hancock is looking to replicate its play for Liontown with Azure, regardless of support for SQM.
“While Rinehart has entered the fray, speculated to be aiming for up to a 19.9 per cent stake, the threshold beyond which would require her to mount a full takeover, Azure revealed on Thursday that more than 50 per cent of shareholders support the SQM deal,” the Australian Financial Review reported.
If once is an accident and twice is a coincidence, will the next stake buying frenzy signify a pattern? Only time will tell.
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