Albemarle's Liontown Ambitions Challenged By Billionaire’s Bold Move

In a move designed to thwart a takeover bid by American lithium giant Albemarle Corp (NYSE:ALB), Australia’s richest woman, Gina Rinehart, has once again boosted her position in Liontown Resources Ltd, Bloomberg reports. 

This is the fourth time in recent weeks that Rinehart, through Hancock Prospecting Pty, has added to her Liontown Resources stake, which now sits at 14.67%, just shy of the 15% needed to potentially block Albemarle’s ~$4.2-billion takeover bid for the Australian lithium miner. In mid-September, Rinehart owned a stake of under 8%, according to Bloomberg. 

Hancock has described the stake as “strategic”, though it has not disclosed the intention of the sudden large increase in ownership of Liontown.

“Hancock maintains a long-term approach to its investments and commodity markets. In line with that long-term approach, Hancock can provide Liontown with the opportunity to manage its project execution and operations ramp-up risk,’’ the company said in a Sept. 25 statement.

Last month, Liontown accepted Albemarle's  improved A$3.00/share offer, while Hancock said it may seek a position on Liontown's board and could help the company bring its lithium resources to production. So far, Hancock has paid no more than A$3.00/share for the four tranches of shares of Liontown it has purchased.

Lithium prices have slumped toward the worst level in two years mainly on concerns over the strength of Chinese demand. The selloff has hit lithium producers, with ALB shares down 28.0% in the year-to-date while the Global X Lithium & Battery Tech ETF (NYSEARCA:LIT) has slumped to its lowest since 2020. 

According to Rystad Energy, the expected uptick of demand for lithium in China in the final quarter of the year has so far failed to materialize thanks to many battery makers still having plenty of inventory to draw down.

By Alex Kimani for Oilprice.com

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