Australia: “Iron Lady” Capitalizes On Lithium

When a deal is afoot, Gina Rinehart isn’t one to sit on the sidelines. Touted as Australia’s wealthiest individual, worth about $26 billion, she’s a player.

Australian mining giant Liontown Resources’s acceptance of a $4 billion-plus cash bid, or A$3 per share, from Charlotte, North Carolina-based lithium miner Albemarle in September, would’ve been a sweet end to a competitive auction. The offer represented a 100% premium to Liontown’s share price back in March.

But behind the scenes, Rinehart spent roughly $1.3 billion to accumulate a 20% stake in Liontown through her company, Hancock Prospecting. Albemarle then nixed the agreement “due to the growing complexities associated with executing the transaction,” Liontown said in a market filing. 

Rinehart, 69, wasn’t explicitly blamed for quashing the deal. And her exact plans for Liontown remain unclear. But, the billionaire has built a reputation over the years as a cunning dealmaker eager to buy Australia’s resources. Close observers of the Liontown negotiations noted that her role underscores the heightened M&A activity in raw materials, where prices are plummeting. Per data from Benchmark Mineral Intelligence, lithium is down 70% and nickel is down 40% in 2023 while cobalt is approaching record lows.

Some companies see the sector as ripe for consolidation. Most recently, lithium producers Allkem and Livent’s agreed to a $10.6 billion merger and Newmont spent $19 billion to acquire Newcrest. The two deals made up the bulk of the $37 billion worth of M&A agreements inked in Australia during the first quarter.

Rinehart, for three decades, has been one of the region’s most active players. She transformed her inherited company, Hancock, into an iron ore empire, earning the moniker of Australia’s “Iron Lady.”  Now she’s targeting Australia’s lush reserves of lithium—a vital component in electric vehicles. The market for lithium is projected to reach $134.6 billion by 2027.

Rinehart’s recent business dealings also hit close to home. Her adult children, as recently as August, have gone to court over certain mining licenses that they allege she unlawfully transferred them to Hancock after her father, Lang Hancock, died in 1992.