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Mining billionaire Gina Rinehart has amassed a 19% stake in Australian lithium producer Azure Minerals, building a large interest in a second lithium player in Australia in a few weeks and potentially derailing another acquisition in the sector.
Azure Minerals Limited said in a notice on Friday that Rinehart, Hancock Prospecting Pty Ltd (HPPL), and subsidiaries of HPPL have acquired shares in the lithium company giving the mining billionaire 18.3% of the voting power.
The notice from Azure Minerals came shortly after the company announced on Thursday that it had entered into a binding Transaction Implementation Deed with a subsidiary of Sociedad Química y Minera de Chile (SQM), under which the Chilean lithium producer, the world’s second-biggest, would buy 100% of the shares in Azure at an equity value of around $1 billion (AUS$1.63 billion).
Hancock Prospecting, owned by Australia’s richest woman Rinehart, has bought 19% of Azure Minerals, it said on Friday. Rinehart’s now substantial stake in Azure Minerals is just below the threshold that would trigger a mandatory offer.
Rinehart, who has made her fortune in iron ore, is betting on lithium to diversify, analysts say.
Azure Minerals holds a 60% stake in the Andover Lithium Project, which is currently in its exploration phase and is expected to complete a maiden Mineral Resource Estimate early next year.
The buying of a large stake in Azure Minerals repeats the events from just a few weeks ago when it became clear that Rinehart had acquired 19.9% of Australian lithium producer Liontown Resources over the past few months.
Partly as a result of Rinehart’s large stake build, Albemarle Corporation, a leading lithium producer, walked out on a $4.16-billion bid for Liontown Resources.
Albemarle said earlier this month that it would not pursue a binding agreement to purchase Liontown Resources and had formally withdrawn its non-binding offer to Liontown's Board of Directors.
“The company noted growing complexities associated with the proposed transaction as a factor in its decision,” Albemarle said.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.