US-based major lithium producer Albemarle has decided to withdraw its A$6.6bn ($4.2bn) offer to acquire Australian lithium developer Liontown Resources, citing the deal's "growing complexities".
The decision comes days after Australia's Hancock Prospecting, controlled by iron ore magnate Gina Rinehart, raised its stake in Liontown to 19.9pc. This placed Rinehart in a position to either make or break Albemarle's bid, if Albemarle were to proceed with its proposal.
Albemarle has previously made attempts to acquire Liontown, with multiple bids rejected since October 2022.
"We acknowledge Albemarle's decision," said Liontown managing director and chief executive officer Tony Ottaviano on 16 October. "They were constructive and respectful throughout the diligence process. Notwithstanding, our position to maintain momentum on our base plan has allowed us to keep line of sight of first production from the Kathleen Valley Project in mid-2024."
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 130ppm tantalum pentoxide.
Liontown in September said it is in discussions to obtain funding to cover A$450mn of capital costs for the project, after an updated estimate put the capital cost amount until its first production at A$951mn.
