Australian Billionaire Rinehart’s Intervention Leads to the Collapse of Major Lithium Deal

Australian Billionaire Gina Rinehart's Intervention Leads to the Collapse of Major Lithium Deal | Mr. Business Magazine

Albemarle abandons a $6.6 billion takeover bid after Gina Rinehart’s Intervention in lithium deal, Albemarle Corp. the world’s leading lithium producer, has officially withdrawn its proposed $4.2 billion acquisition of Australian miner Liontown Resources Ltd. The U.S.-based giant had been actively pursuing Liontown, a Perth-based mining company, for several months, aiming to expand its production capacity. However, in recent weeks, it faced an unexpected challenge from Australia’s wealthiest woman, mining magnate Gina Rinehart, whose company, Hancock Prospecting Pty., quietly amassed a 19.9% stake in Liontown, making her the largest shareholder and potentially able to block the deal.

Liontown Resources announced on Monday that Albemarle had informed them of its decision to abandon the acquisition due to “the growing complexities associated with executing the transaction.” Albemarle had previously extended its due diligence period by seven days and had made a “best and final” offer of A$3 per share in early September, representing nearly a 100% premium to the share price before its initial takeover proposal in March.

The Lithium Effect

Gina Rinehart, known for her success in iron ore mining, has not yet presented an alternative plan for Liontown’s future. Hancock Prospecting, on October 11, stated its intention to have a “prominent influence in Liontown’s future.” Gina Rinehart’s shareholding is currently just shy of the 20% threshold that would trigger a mandatory takeover offer.

Gina Rinehart is strategically investing in lithium as China’s demand for the steelmaking material wanes, while global lithium demand, a vital component in batteries, remains strong due to the clean energy transition.

Albemarle abandons $6.6 billion takeover bid after Gina Rinehart Intervention

Liontown Resources, with its Kathleen Valley lithium project as its prized asset, sought a trading halt on Monday as it aims to secure funding for the project. Hancock Prospecting had previously raised concerns about Liontown’s development, highlighting potential execution, operational ramp-up, and market risks, but expressed an interest in participating as a shareholder.

Lithium Production Continues

Despite the setback, Liontown is forging ahead with the Kathleen Valley project, set to begin lithium production in the middle of the next year. It has secured deals to supply companies like Ford Motor, Tesla, and LG Energy, a prominent electric vehicle battery manufacturer.

As Albemarle has stepped back from the acquisition, industry experts speculate on potential supply agreements and capital commitments that may emerge in the future. Albemarle declined to comment on its future engagement with Liontown but emphasized having adequate feed for its Australian operations.

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