Australia billionaire weighs in on Albemarle's takeover target Liontown

Monadelphous

26/09/2023 06:29

MELBOURNE, Sept 26 (Reuters) - Hancock Prospecting,
owned by Australia's richest person Gina Rinehart, said on
Tuesday it could help Liontown Resources  LTR.AX  build its
lithium mine, after raising its stake in the developer that has
accepted a buyout bid from Albemarle  ALB.N . 
    Rinehart's company became a substantial shareholder earlier
in September and now owns 10.7%, a Liontown shareholder notice
on Monday showed.
    Hancock Prospecting did not make any comment about its
position on Albemarle's offer for Liontown.
    Liontown controls two major lithium deposits in Western
Australia, including its flagship Kathleen Valley project, which
is among the world's largest and highest-grade hard rock lithium
deposits, slated to start production in mid-2024.
    Hancock said it built up its stake for no more than $3.00 a
share, which was Albemarle's buyout offer price, and an average
bid price that was "well below" that level. Prices of hard rock
lithium have fallen around 40% in the past few months, weighing
on producers' shares.
    "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," it said in a statement to Reuters on Tuesday.
 
    Hancock said Liontown's targeted lithium recovery rate was
higher than that of most existing and planned lithium producers
in Western Australia. 
    Liontown declined to comment on Hancock's views.
    "Hancock has a demonstrated project development and
operations ramp-up capability. This includes the highly
successful $10 billion Roy Hill iron ore project in West
Australia which was delivered on schedule and below budget, and
was followed by an efficient production ramp-up."
        Hancock said earlier in September it may in future seek
a board seat, when it raised its stake in Liontown to 7.72%,
which made it a "substantial shareholder" under Australian
securities law.
    Liontown awarded its final construction project for
approximately A$100 million on Sept. 12 to Monadelphous Group
 MND.AX .
    Liontown shares fell 2.8% on Tuesday to A$2.915.
    

 (Reporting by Melanie Burton; Editing by Sonali Paul)
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