Australia's Hancock Prospecting has raised its stake in domestic lithium developer Liontown Resources to 16.7pc as of 6 October, with the prospect of further acquisitions now threatening US producer Albemarle's A$6.6bn ($4.2bn) bid.
Hancock, controlled by iron ore magnate Gina Rinehart and now Liontown's largest shareholder, holds enough sway to potentially block Albemarle's proposal to acquire Liontown. Hancock does not currently intend to put forward any director nominations at Liontown's annual general meeting but "remains open" to it in the future and "particularly if its strategic stake continues to increase towards 19.9pc", it said.
Albemarle previously submitted a new non-binding proposal for Liontown, after multiple bids were rejected since October 2022. Liontown's board of directors on 4 September unanimously recommended shareholders vote in favour of the new proposal in the absence of a superior proposal.
Albemarle's bid made through a scheme of arrangement requires 75pc support from Liontown investors voting in the ballot. But in practice it may be blocked with a stake lower than 25pc depending on voter turnout. Voter turnout for a scheme of arrangement in Australia averages about 62pc of issued shares, according to a legal guide by international law firm Herbert Smith Freehills.
Hancock said it "welcomes the opportunity to participate in the Kathleen Valley project as a shareholder" and "have an influence on the company's overall future direction, including where decisions are to be made by shareholders". Liontown's Kathleen Valley project in Western Australia aims to produce its first lithium concentrate in mid-2024, before increasing to 500,000 t/yr of lithium concentrate output with plans to subsequently expand to 700,000 t/yr. It is one of Australia's largest hard rock lithium deposits with a mineral resource of 156mn t grading 1.4pc lithium oxide and 130 parts per million tantalum pentoxide.
