The American company Albemarle Corp., a world leader in the mining of lithium, withdrew its offer for a deal to buy the Australian mining company Liontown Resources, which was for 4.2 billion dollars. Albemarle’s decision was influenced by the fact that the richest Australian – Gina Rinehart, through her company Hancock Prospecting, increased her stake in Liontown Resources to 19.9%, thus becoming the largest investor in the company.
As Bloomberg notes, this allows her, if she wishes, to block a shareholder vote on the sale of Liontown Resources to the US company.
Liontown owns two major lithium deposits in Western Australia. The start of production at the company’s flagship Kathleen Valley project is scheduled to begin in mid-2024. It is one of the largest and highest quality hard rock lithium deposits (deposits) in the world.
Albemarle has been eyeing the Liontown purchase since the beginning of this year. The first offer made by Albemarle was rejected by the Board of Directors of the Australian company. At the time, they considered the offer of A$2.50 per share unacceptably low.
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In 2021, the world produced 540,000 metric tons of lithium, demand is forecast to reach over 3 million in 2030.
Albemarle’s fourth bid, made in September, was accepted by the Australian company’s management and was expected to be backed by shareholders. However, Gina Rinehart, who has amassed her fortune mainly through the iron ore deposits of Western Australia, intervened in the situation. Thus, its stake in Liontown became its largest investment in lithium production.
Liontown commented to Bloomberg that the American company warned them that it would not continue with the procedure of preparation for the purchase, due to “increasing difficulties related to the realization of the transaction”.
Liontown’s share prices are down nearly 8% since Albemarle’s last offer so far. They are also reacting to Albemarle’s current decision with an additional 0.83% decline. Albemarle’s shares fell by 4.34% yesterday.
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2023-10-17 05:30:38
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